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Refiners, offshore producers shut ahead of Hurricane Sally landfall


HOUSTON (Reuters) – More than one-fifth of U.S. offshore oil production was shut and key exporting ports were closed on Tuesday ahead of Hurricane Sally’s landfall on the U.S. Gulf Coast, the second significant hurricane to shutter oil and gas activity over the last month.

Sally was upgraded to a Category 2 hurricane on Monday and could strengthen further before making landfall late on Tuesday, the U.S. National Hurricane Center said. The storm’s trajectory has shifted east toward southwestern Mississippi, however, sparing some of Louisiana’s refining operations.

The U.S. government said 21%, or nearly 396,000 barrels per day (bpd), of offshore crude oil production and 25%, or 685 million cubic feet per day (mmcfd), of natural gas output were shut in the U.S. Gulf of Mexico.

The nation’s sole offshore terminal, the Louisiana Offshore Oil Port (LOOP), stopped loading tanker ships on Sunday, while the port of New Orleans closed on Monday. That will cut off roughly 307,000 bpd of crude and 411,000 bpd of refined products, according to Kpler data.

As of 11 p.m. CDT on Monday, Sally was about 90 miles (145 km) east of the mouth of the Mississippi River, and winds were picking up, with sustained winds of up to 100 mph (155 kph).

Offshore facilities operated by Chevron Corp CVX.N and BP Plc BP.L have been shut, less than one month after Hurricane Laura forced roughly 1.5 million barrels per day of output to close temporarily.

Refiners in the region have wound down operations. The Phillips 66 PSX.N Alliance oil refinery, which processes 255,600 bpd at a site along the Mississippi River on the coast of Louisiana, shut on Monday, said operator Phillips 66.

Shell RDSa.L cut production to minimum rates on Monday at its 227,400-bpd Norco, Louisiana, refinery.

Reporting by Erwin Seba, Gary McWilliams in Houston and Devika Krishna Kumar in New York; Editing by Edwina Gibbs



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