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US offshore oil and gas drillers continued to shutter production Thursday as Tropical Storm Barry develops in the northern Gulf of Mexico.
The US Department of Interior's Bureau of Safety and Environmental Enforcement said Thursday that Gulf of Mexico drillers had shuttered 53% of oil production and 45% of natural gas output ahead of storm.
The National Hurricane Center expects Barry to reach hurricane strength late Friday or early Saturday and make landfall in Louisiana.
**Major refiners sit in the storm's projected path in the Houston area and southeast Louisiana. Plants are monitoring the storm and taking precautions ahead of potential storm surge, rain and wind.
**The storm could slow US oil and LNG exports if terminals and shipping operations are interrupted.
**The US exports more than three times as much crude oil and LNG as it did when Hurricane Harvey hit the Houston area in August 2017.
**Offshore Gulf of Mexico production was estimated at 1.81 million b/d of oil and 2.91 Bcf/d in June, according to the Energy Information Administration.
**Barry could cut Gulf of Mexico crude production by 140,000 b/d-230,000 b/d in July, according to S&P Global Platts Analytics estimates.
**Ship-to-ship lightering operations in the Southwest Passage and Galveston Offshore Lighterage areas have come to a halt as of Thursday morning, shipping sources involved in operations said.
**There have been no interruption in receipts or deliveries at Louisiana Offshore Oil Port's Clovelly Hub, according to a statement by the company Thursday afternoon.
**The Port of New Orleans late Thursday was set at Port Condition Yankee, closing it to traffic as gale-force winds were expected within 24 hours.
**Crude oil futures retreated Thursday. NYMEX August WTI settled down 23 cents at $60.20/b. NYMEX August ULSD settled 1.24 cents lower at $1.9786/gal. August RBOB settled 1.57 cents lower at $1.9895/gal.
**US Gulf Coast sour crude benchmark Mars edged lower Thursday as the market seemed to pause following previous strengthening of the grade this week. Platts assessed Mars 5 cents/b lower on the day at WTI plus $3.60/b.
**Along the US Gulf Coast, gasoline differentials mostly rallied higher as concern about severe tropical weather along the Gulf of Mexico roiled markets.
**Benchmark conventional grade gasoline was assessed at August NYMEX RBOB futures minus 3.75 cents/gal, up 50 points on the day and the strongest the differential has been against any futures contract since the assessment from April 15, Platts data show.
**Day-ahead bids and offers on the Intercontinental Exchange for the Midcontinent Independent System Operator's Louisiana Hub weakened with a milder temperature forecast Thursday morning to a range of $30-$40/MWh, down from a bid/ask of $35/MWh and $65/MWh Wednesday.
**S&P Global Platts Analytics has determined that natural gas power burn demand dropped 0.6 Bcf/d since Tuesday down to 12.8 Bcf/d in the Southeast, and has forecast that number to be down about 0.7 Bcf/d over the next week "with substantial downside risk should severe weather ... weaken electric loads."
**Cash prices in the Southeast and East Texas varied on Thursday. Houston Ship Channel settled 0.5 cents lower at $2.435/MMBtu; Carthage Hub settled 6.5 cents higher at $2.375/MMBtu; and Transco Zone 2 settled 1.5 cents lower at $2.425/MMBtu. In the Southeast, Henry Hub settled 2 cents higher at $2.475/MMBtu.
OIL AND GAS INFRASTRUCTURE
**US offshore drillers have shut 1 million b/d, or 53%, of Gulf of Mexico oil production and 1.2 Bcf/d, or 45%, of natural gas output as Tropical Storm Barry heads toward Louisiana's coast, the Bureau of Safety and Environmental Enforcement said Thursday.
**BSEE said 191 platforms and seven non-dynamically-positioned rigs have been evacuated, and 11 dynamically-positioned rigs have been moved off site.
**Phillips 66 is preparing to shut in its 253,600 b/d Alliance refinery in Belle Chasse, the first such facility to shut as the storm bears down on the Louisiana coast.
**Chevron said it was following its storm procedure plans at its two regional refineries - the 330,000 b/d Pascagoula, Mississippi, plant and the 112,229 b/d Pasadena, Texas, plant.
**Chevron said its Fourchon and Empire terminals are still operating, but Chevron Pipe Line has "shut down, secured and evacuated" the Whitecap Ship Shoal 208 platform.
**Chevron, Anadarko and BP have started shutting in Gulf of Mexico production and evacuating staff from drilling platforms.
**Chevron is shutting production at its Big Foot, Blind Faith, Genesis, Petronius and Tahiti platforms. Production continues at its Jack St. Malo deepwater project.
**Anadarko is shutting production at its Constitution, Heidelberg, Holstein and Marco Polo platforms in the central Gulf of Mexico.
**Shell has started evacuating nonessential staff, but is continuing production. Shell has slowed production at its Olympus project by 1,835 b/d and at its Mars project by 700 b/d.
**There are eight US Gulf Coast liquefaction trains with total capacity of approximately 4.8 Bcf/d in operation at three terminals within range of potential impact from Tropical Storm Barry.
**Inclusive of gas consumed at the liquefaction facilities, total gas deliveries were down to 4.8 Bcf/d on Thursday, from an average of nearly 5.4 Bcf/d this month, due entirely to a decline at Cheniere Energy's Sabine Pass terminal in Cameron Parish.
**LNG production appeared to be continuing at Sabine Pass, Sempra Energy's Cameron LNG facility in Hackberry, Louisiana, and Cheniere's terminal near Corpus Christi, Texas. At Cameron, commissioning activities underway for Train 1 continued and the terminal's production schedule remained on track.
**The biggest impact to the terminals in operation could come from vessel traffic restrictions along the intracoastal waterways that serve the terminals. In coordination with the US Coast Guard, Sabine Pilots suspended inbound tanker transits along the intracoastal waterway that serves the Sabine Pass terminal on Wednesday evening.
**A pilots dispatcher said Thursday afternoon that pilots services were no longer suspended and they were taking inbound vessels, but that Cheniere was not taking in any vessels to its facility Thursday as it continued to monitor port conditions provided by the Coast Guard.
**MISO on Thursday declared a Severe Weather Alert for midnight Friday morning through midnight Monday morning for the areas of the central Gulf Coast threatened by a tropical depression strengthening in the Gulf of Mexico.
**The alert includes a request for deferral or cancellation of maintenance and testing of any critical transmission or generation systems in the area.
**Entergy, which operates the 1,222-MW Waterford-3 nuclear plant near New Orleans, said in a tweet Thursday that it is "keeping a close watch" on Barry's track.
**Water levels at the company's three plants that draw cooling water from the Mississippi -- the 1,498-MW Grand Gulf in Port Gibson, Mississippi, 992-MW River Bend in St. Francisville and Waterford-3 -- are "well under" the levels at which the units would have to protectively shut, Entergy spokesman Michael Bowling said.
**Cargo terminals within the Port of New Orleans and New Orleans Public Belt Railroad were ceasing operations at noon CDT Thursday.
**The Port of New Orleans is a major steel and nonferrous metals trade hub that also handles other breakbulk cargo, such as rubber, wood, paper, plastics and other commodities.
**Gates at the Napoleon Avenue Container Terminal closed by noon Thursday. Due to planned floodgate closures, the terminal will remain closed Friday, but this is subject to change based on conditions.
**Chemical companies with Louisiana operations in Barry's path were monitoring the storm and preparing their sites for heavy rain, but operations remained normal.
**The storm's approach gave some companies with new plants a chance to implement storm plans that may have been adjusted to account for additional facilities.
-- Staff report, firstname.lastname@example.org
-- Edited by Gary Gentile, email@example.com