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Gulf of Mexico Tropical Storm Cindy disrupts shipping, crude imports

Cindy could delay oil imports, exports through the week. Storm in Louisiana, Texas coastline Thursday

Petroleumworld 06 21 2017

Tropical Storm Cindy has halted service at a major oil terminal in the Gulf of Mexico, prompted some evacuations at rigs and platforms and put states from Texas to Florida on notice for life-threatening floods.

Cindy was 200 miles (322 kilometers) southeast of Galveston, Texas, with top winds of 60 miles an hour early Wednesday. Its center is forecast to move inland over southeastern Texas or southwestern Louisiana Thursday, according to a U.S. National Hurricane Center advisory issued at 7 a.m. New York time.

The storm has triggered watches and warnings along the Texas-Louisiana coast including Galveston Bay, the entrance to the Houston Ship Channel and Sabine Pass, the site of the only active liquefied natural gas export terminal in the lower 48 states. Pilots have stopped guiding ships into Sabine Pass, which also funnels traffic to the ports of Beaumont and Port Arthur in Texas.

Storms in the Gulf can often roil energy markets because offshore rigs and platforms account for about 17 percent of U.S. crude oil output and 4.1 percent of gas production.

Vessel offloading at the Louisiana Offshore Oil Port marine terminal was suspended. The rest of the company's operations, including deliveries from its Clovelly, Louisiana, hub, were expected to continue, according to the company's website.

“While the storm may not be a whopper, it will influence shipping and may impact imports and exports of oil for next week,” Phil Flynn, a senior market analyst at Price Futures Group Inc. in Chicago, wrote in a note.

Enbridge Inc. evacuated nonessential workers from some platforms in the Gulf. Royal Dutch Shell Plc suspended “some well operations” in the region, though production is unaffected, according to company spokesman Curtis Smith. BP Plc and Anadarko Petroleum Corp. also evacuated nonessential personnel. BHP Billiton Ltd suspended non-essential operations and “demobilized” non-essential workers.

The Midcontinent Independent System Operator Inc. declared a severe weather alert for the southern part of its electric grid, including Louisiana and Mississippi.

It's been a year since the U.S. Gulf Coast took a storm hit. Tropical Storm Colin and Hurricane Hermine struck Florida last year. The last storm to reach the western Gulf was Tropical Storm Bill in June 2015.

Power outages caused by the storm and subsequent flooding may have the largest market impact. Entergy Corp. said restoration workers in Louisiana and Texas are prepared to respond and that teams in Arkansas and Mississippi are ready to relocate if needed.

“It's essentially a demand destroyer for the Deep South,” said Matt Rogers, president of the Commodity Weather Group LLC in Bethesda, Maryland. “No production concerns really.”

Cindy could bring 6 to 9 inches (15 to 23 centimeters) of rain across parts of Louisiana, Mississippi, Alabama and Florida, with some areas getting as much as 12 inches, the center said. Lesser amounts are forecast in Texas and are expected to spread across Arkansas.

Flood advisories, as well as tornado watches, spread across the Gulf states from Texas to Florida and north into parts of Georgia. Flash flooding could create life threatening situations, the National Weather Service said.

In addition, the weather service said there is a possibility for flooding later this week in Georgia, Tennessee, Kentucky and southern Indiana as rain from the remnants of Cindy drenches the area.

Story by Brian K Sullivan from Bloomberg.

06 21 2017

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