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Offshore oil wells, ports shut as U.S. Gulf Coast storm advances

September 16/2020

MOSCOW (MRC) -- Energy companies, ports and refiners race to complete shutdowns as Tropical Storm Sally bores in on the central U.S. Gulf Coast with expectations that it will soon become a hurricane, said Reuters.

The storm will disrupt oil imports and exports as the nation's sole offshore terminal, the Louisiana Offshore Oil Port, stopped loading and offloading tanker ships on Sunday and as the port of New Orleans closes. Numerous offshore production facilities are shutting just a few weeks after Hurricane Laura forced roughly 1.5 MM barrels per day (bpd) of output to close.

Sally will move over the north-central Gulf of Mexico before becoming a hurricane as it heads toward southeastern Louisiana and western Mississippi, the U.S. National Hurricane Center (NHC) said. Officials in the two states issued mandatory evacuations for residents in low-lying areas.

The U.S. Coast Guard said all southbound vessel traffic from the port of New Orleans would be brought to a halt at noon CDT (1700 GMT) on Monday and stop all traffic from the port at 6 p.m. CDT (2300 GMT).

Chevron Corp, BP Plc, Chevron, Equinor and Murphy Oil all evacuated some offshore workers from production platforms, the companies reported. Royal Dutch Shell Plc curtailed production at its Olympus, Mars and Appomattox platforms on Monday, the company said.

U.S. Gulf of Mexico offshore oil production delivers about 17% of U.S. crude oil and 5% of U.S. natural gas output.

The port of New Orleans and LOOP combined exported about 307,000 bpd of crude and 411,000 bpd of refined products and imported about 342,000 bpd in crude volumes in the three months through August, according to Kpler data.

Refiners in the region have also begun to wind down operations. Shell cut production to minimum rates on Monday at its 227,400 bpd Norco, Louisiana, refinery, including idling the refinery's crude distillation unit, said sources familiar with plant operations.

The Alliance oil refinery, which processes 255,000 bpd at a site on the coast of Louisiana, was shutting down, said operator Phillips 66.

Earlier this year, as MRC wrote previously, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
Author:Anna Larionova
Tags:North America, petroleum products, crude oil, PP, PE, petrochemistry.
Category:General News
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