Offshore installations finalize preparations for Gustav (Updated)

UPDATED 2:30 p.m.:
Gulf of Mexico oil and gas operators are finishing efforts to evacuate workers and shut down production. The federal government said that as of 11:30 a.m. today, personnel have been whisked to shore from 223 platforms, or about one-third of the Gulf’s 717 manned installations. Workers from 45 drilling rigs, or 37 percent of the 121 rigs currently operating in the Gulf, also have been evacuated.


BRETT COOMER, Houston Chronicle

BP’s Thunder Horse platform, located 150 miles southeast of New Orleans and possibly near Hurricane Gustav’s path toward the U.S., is the world’s largest moored semi-submersible oil and gas platform.

The government said that from operators’ reports this morning, nearly 77 percent of ol production and more than 37 percent of natural gas production has been shut in, meaning valves below the seabed have been closed to stop the flow and ensure no leaks. The Gulf currently provides about a quarter of U.S. oil production at 1.3 million barrels a day, and nearly 15 percent of natural gas production at 7.4 billion cubic feet per day.
Royal Dutch Shell is evacuating the last of its people on Gulf of Mexico oil and gas platforms as they conduct final shut-ins of production with Hurricane Gustav looming. Frank Glaviano, vice president of Production Americas, and David Sexton, vice president of Portfolio Americas, spoke to reporters today about the flurry of activity.
“Doing great, just hunkering down,” Glaviano said.
Glaviano, who oversees exploration and production in the Gulf, said Shell is at the tail end of an evacuation and shut-in plan that was forged Monday and went into effect Wednesday. The company will have evacuated 1,400 employees and contractors from installations and shut in all of its net 480,000 barrels of oil equivalent of production by days’ end. Net production includes that companies get from facilities they operate as well as their share of production from other facilities they partially own but are operated by others.
He said some facilities that produce only natural gas can be shut in remotely, but the vast majority must be shut in by the last to leave the installation. So for major producers like Shell’s Mars and Ursa platforms, which are among many in Gustav’s current projected path, 16 people remain on board to do final shut-ins before the last round of helicopters swing through to ferry them back to shore. Any more people would require more than one helicopter.
Other companies are doing the same, including Chevron, Anadarko Petroleum and Exxon Mobil. Anadarko said today it is evacuating the remainder of workers not essential to production today, and has shut in production of about 105,000 barrels of oil equivalent. The company expects to be fully evacuated and shut in by tomorrow. Chevron didn’t release shut-in figures, but Exxon Mobil said about 5,000 barrels a day of oil and 50 million cubic feet of gas has been shut in.
Drillers also are evacuating moored rigs and moving others out of Gustav’s path. Transocean, the Gulf’s largest driller, has evacuated about 600 people from 11 rigs in the basin over the past few days, spokesman Guy Cantwell said today. The company still has 970 people aboard those rigs.
Of those 11, three are moored and have been fully evacuated. The other eight are rigs or drillships that can disconnect from operations at the seafloor and move out of Gustav’s path, and will do so by tomorrow.
Sexton said Shell will decide tomorrow whether to reduce run rates at or shut down the company’s Gulf Coast refineries and chemical plants. Nonessential workers have already left those facilities, but they remain running today as officials monitor the storm.
Other companies with refineries on the Gulf Coast, home to 42 percent of U.S. refining capacity, are preparing as well. Marathon announced today that it started shutting down its Garyville, La. refinery today, which processes up to 256,000 barrels of oil per day. ConocoPhillips’ refineries in Belle Chasse and Lake Charles, La., and Sweeny, Texas are preparing for high winds and water. The Alliance refinery is operating at reduced rates and has released workers nonessential to operations. The company also is planning to shut down refineries as needed.
Exxon Mobil’s chemical plants and refineries along the Gulf Coast also are implementing hurricane safety plans, but they are operating normally.
Shell also is ready to ensure gas stations are resupplied as coast residents fill up before evacuating. He said Louisiana stations in New Orleans, Baton Rouge and Lafayette have seen “extraordinary demand” with a few stations running out of gas, but they’re being restocked as quickly as the network will allow. And lessons learned from lengthy power outages after hurricanes Katrina and Rita hit three years ago prompted Shell to install emergency backup generators at all terminals that supply Gulf Coast gasoline stations so they can restock without disruption when needed.
“We feel very comfortable with where we are,” Sexton said.
Most companies, including Shell, contract with helicopter companies to ferry workers to and from platforms. Chevron stands out in that it owns its own fleet and employs its own pilots. And massive evacuations like the ones under way in the Gulf keep helicopters flying, but Glaviano said Shell hasn’t felt any bottlenecks. The company has 10 helicopters dedicated solely to Shell all the time, and Monday exercised its right to first call for seven more.
UPDATED 12:30 p.m.: Bloomberg reports Valero’s refineries are slowing production along the Gulf Coast at St. Charles, La., Port Arthur, Texas City and Houston. The company has not slowed output at its two Corpus Christi plants, spokesman Bill Day said.
Service stations in parts of Louisiana are closing as evacuation orders are issued, said the company, which will decide soon whether to close certain refineries.
UPDATED 11:18 a.m.: Bloomberg reports the Louisiana Offshore Oil Port, the nation’s largest oil import terminal located off the central Louisiana coast, shut down at 9:30 a.m. and staff are getting out.
Spokeswoman Barbara Hestermann said shipments to refineries are continuing from its 53 million barrels of storage located onshore, however, according to Bloomberg.
Hurricane Gustav muscled up into a Category 3 storm overnight remains headed down the throat of the bulk of oil and gas production in the central and east-central parts of the Gulf of Mexico. Operators that started bringing workers to shore earlier this week are shutting in production and fully evacuating installations by today or tomorrow.
BP, a major Gulf player, said today it is shutting in all its Gulf production before evacuating all workers by noon. The London-based oil giant has several installations in the storm’s current projected path, including Atlantis, a new platform about 150 miles south of New Orleans that started producing in December, and Thunder Horse, the biggest platform in the world, that just started pumping from a single well in June after three years of delays.
A ballast system failure left Thunder Horse listing 20 degrees after Hurricane Dennis blew through the Gulf in July 2005, and a year later a critical piece of equipment on the seabed sprung a leak, forcing the company to haul it and three others ashore for repairs. Gustav will be the first major storm to head for the $5 billion behemoth 150 miles southeast of New Orleans since it underwent intricate repairs and started the lengthy commissioning process.
Royal Dutch Shell, also a major Gulf player, said today that it aims to finish evacuating all workers and shutting in production as well. Shell also has several platforms in Gustav’s path, and last year just finished extensive repairs to a drilling rig on its Mars installation that was destroyed by Hurricane Katrina.
And Marathon Oil also said today that it has cleared all workers off of two small platforms less than 100 miles from the Louisiana coastline and shut in production at its Lobster platform. Production at the second platform has been shut since July for mechanical issues.
Other companies, including Chevron, Exxon Mobil and Anadarko Petroleum were making similar preparations today. Anadarko operates the Independence Hub, the deepest platform in the world in 8,000 feet of water 185 miles southeast of New Orleans that produces 1 billion cubic feet of gas per day, expects to finish all evacuations and shut-ins by tomorrow.