Energy companies curbing Gulf output as workers evacuated for Tropical Storm Karen

Anadarko Petroleum Corp. (APC) and Exxon Mobil Corp. (XOM) curbed production in the Gulf of Mexico and other energy companies evacuated workers from platforms and pipelines as Tropical Storm Karen triggered a hurricane watch.

Exxon curtailed output by 1,000 barrels of oil equivalent a day and pulled nonessential personnel from offshore operations in Karen’s path. Andarko shut and evacuated the Independence Hub and three other platforms in the central and eastern Gulf. BP Plc (BP/), Chevron Corp. (CVX), Enterprise Products Partners LP (EPD), Marathon Oil Corp. (MRO) and Royal Dutch Shell Plc (RDSA) said they were also moving personnel out of the system’s track yesterday.

The storm “appears to be heading through the heart of the production center of the Gulf of Mexico, and that will impact oil and gas production,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said by telephone yesterday.

The region is home to 23 percent of U.S. oil production, 5.6 percent of gas output and more than 45 percent of petroleum refining capacity, data compiled by the Energy Information Administration, the Energy Department’s statistical arm, show.

Karen’s top sustained winds strengthened to 65 miles (105 kilometers) per hour yesterday, up from 60 mph earlier. It was about 400 miles south of the mouth of the Mississippi River and moving north-northwest at 12 mph, the National Hurricane Center in Miami said in an advisory at 5 p.m. New York time yesterday.

Possible Path

The center’s tracking map forecasts Karen will make landfall as a strong tropical storm near the Florida-Alabama line tomorrow.

A hurricane watch, meaning storm conditions may arrive in two days, was posted from Grand Isle, Louisiana, to just west of Destin, Florida. A tropical storm warning is in effect from Grand Isle to the mouth of the Pearl River on the Louisiana-Mississippi line.

New Orleans, the coast from Grand Isle to Morgan City, Louisiana, and the area from Destin to Indian Pass, Florida, are under a tropical-storm watch.

Destin Pipeline LLC, which can transport 1.2 billion cubic feet of gas a day from the Gulf, declared force majeure yesterday, saying in a notice to shippers that it’s incapable of providing transportation services from its offshore receipt points because of the storm.

LOOP LLC, the only U.S. port capable of offloading ultra-large crude carriers, was monitoring Karen, the Covington, Louisiana-based company said in a statement on its website. Nexen, the Cnooc Ltd. (883) unit based in Calgary that operates in the Gulf, was also tracking the system.

Workers Pulled

BP, based in London, began evacuating workers Oct. 2 from its four deepwater platforms, Thunder Horse, Na Kika, Atlantis and Mad Dog. Marathon removed nonessential workers from the Ewing Bank platform 130 miles south of New Orleans, the Houston-based company said on its website yesterday.

Anadarko, with headquarters in The Woodlands, Texas, halted production and evacuated all employees from the Independence Hub and the Neptune, Constitution and Marco Polo platforms, the company’s website showed. The Hague-based Shell was removing some nonessential personnel from drilling operations in the eastern Gulf, the company said on its website.

Enterprise Products Partners LP, based in Houston, was evacuating all workers yesterday from four platforms connecting production to pipelines, Rick Rainey, a company spokesman in Houston, said by telephone yesterday. One of the platforms will be shut, he said.

Platforms Emptied

Era Helicopters LLC, a Lake Charles, Louisiana-based company that transports workers to oil and gas fields in the Gulf, had at least one oil and gas customer activate a hurricane standby aircraft yesterday, Molly Hottinger, spokeswoman for Era in Lake Charles, said by e-mail.

Enbridge Inc. (ENB)’s Manta Ray Offshore Gathering system, which collects 800 million cubic feet of gas a day in the Gulf, began evacuating all personnel from two platforms yesterday, the company’s website showed. The Garden Banks Gas Pipeline LLC also removed workers from the South Marsh Island 76 platform, a notice to shippers shows.

“We will continue to watch the storm closely to determine if further evacuations are necessary,” Terri Larson, an Enbridge spokeswoman in Houston, said by e-mail yesterday. “There is no impact to operations.”

Wind Shear

Karen may encounter wind shear as it crosses the Gulf, said Matt Rogers, president of the Commodity Weather Group LLC in Bethesda, Maryland. Shear, when winds blow at varying speeds or directions at different altitudes, could tear at the storm’s structure.

Energy markets are expecting supply disruptions to be “rather short-lived” since the storm isn’t forecast to develop into a major hurricane, Lipow said.

Gasoline futures for November delivery rose 1.09 cents, or 0.4 percent, to settle at $2.6396 a gallon yesterday on the New York Mercantile Exchange. Oil dropped 0.8 percent, and natural gas declined 1.2 percent.