Oil, gas firms begin to shut U.S. Gulf production on storm threat

By Kristen Hays

HOUSTON (Reuters) - Oil and gas companies in the Gulf of Mexico started shutting in production on Thursday and were evacuating some workers as Tropical Storm Karen moved toward the U.S. Gulf Coast.

Anadarko Petroleum Corp <APC.N> said it halted production at its Neptune platform, with capacity to produce up to 14,000 barrels per day of oil and 23 million cubic feet per day of natural gas.

The company was also evacuating workers not essential to production from Neptune and other platforms, including the natural gas-only Independence Hub, with capacity to produce up to 1 billion cubic feet of gas per day.

The Independence Hub is at the easternmost part of the Gulf where oil and gas producers can operate, about 185 miles southeast of New Orleans. It is located in a Gulf area known as the Mississippi Canyon, which is home to much of the basin's energy infrastructure, including two of BP Plc's <BP.L> Gulf platforms.

The National Hurricane Center expected the storm to move through Mississippi Canyon toward the Gulf Coast between Louisiana and the Florida Panhandle. The NHC said the storm could strengthen into a hurricane before making landfall.

The Gulf accounts for about 19 percent of U.S. daily oil production and about 6 percent of daily natural gas output, according to the U.S. Energy Information Administration.

BP said on Thursday it was continuing evacuations of some workers, but no production had been shut. ConocoPhillips, which operates a single platform far west of Mississippi Canyon, said on Thursday it did not expect any impact from Karen.

In the Gulf Coast cash gasoline market, differentials surged about 3.00 cents per gallon on storm concerns, traders said.

"All storm hype," a Gulf refined products trader said on the rise in differentials, which came despite a 1.85-million-barrel inventory build last week in the well-supplied region.

Onshore, a crude distillation unit at Chevron's <CVX.N> Pascagoula, Mississippi refinery with capacity of 210,000 bpd was shut early on Thursday, market intelligence service Genscape said, though the company did not confirm the stoppage or say if it was storm-related.

Other operators, including Royal Dutch Shell <RDSa.L> - the biggest oil producer in the U.S. Gulf - and Hess Corp <HES.N>, said they were monitoring the storm, but had not begun evacuations.

An official from Mexico's state-run producer Pemex <PEMX.UL> has said the company was closely monitoring the situation, but also had not ordered any offshore or onshore evacuations at any installations.

(Reporting by Kristen Hays; editing by Terry Wade, G Crosse)