Australian cyclone shuts Rio Tinto ports
Australia's first cyclone of the storm season is intensifying off the country's northwest, shutting key iron ore export terminals and crude production at offshore oilfields in mining powerhouse Western Australia state, Reuters reports.
Australian oil producers Woodside Petroleum, Apache Corp and BHP Billiton are disconnecting oil production vessels from offshore fields such as Cossack, Pyrenees, Van Gogh, Enfield and Stybarrow, sources with direct knowledge of the matter said.
The companies could not immediately be reached for comment on the shutdown of the fields.
The fields contribute about a third of Australia's oil production of about 390,000 barrels per day, but the impact on the Asia-Pacific crude market will depend on how long they stay shut and whether production resumes smoothly, traders said.
Rio Tinto , the world's second-largest iron ore producer, has suspended ship loading at the ports of Dampier and Cape Lambert as Cyclone Narelle intensified off the northwest coast of Australia.
Earlier in the day, BHP Billiton and Fortescue Metals Group , the world's third-largest and fourth biggest producers, said they were closely monitoring the cyclone's progress as it heads toward land.
"Operations are continuing throughout the business as usual," Fortescue said in a statement emailed to Reuters.
Mining companies with operations in the west Australian Pilbara iron belt, adhere to strict procedures for keeping tabs on approaching cyclones. There are on average around seven cyclones a year in Western Australia.
"Due to the sea conditions, the port authorities have closed the ports at Dampier and Cape Lambert," a Rio Tinto spokesman said.
"As a result, Rio Tinto ship loading operations have been suspended. All other operations, including mining, rail movements, car-dumping and other port operations, are continuing as before," the spokesman said.
Fortescue said it was getting ready to take emergency measures to ensure the safety of staff if the cyclone suddenly changes direction and speed, which is a common occurrence with such storms in the Pilbara.
Iron ore was last quoted at $158.50 a tonne , the highest price since Oct. 14, 2011, in part on brisk buying by Asian steel mills ahead of any delays to shipments from Australia caused by cyclones.
Iron ore freighters used in Australia typically take 24 to 36 hours to fully load.
Cyclone Narelle is a category three storm, and is expected to gather strength and be upgraded to a category four by early Friday, according to the Australian Bureau of Meteorology.
The storm was moving southwest towards Australia's Pilbara coast, with winds in its centre possibly increasing to 250 kph (155 mph), according to the Bureau of Meteorology.
Narelle was located offshore some 700km (430 miles) north of the coastal town of Karratha, an oil and mining services hub used by Woodside Petroleum, Apache Corp, CITIC Pacific , Rio Tinto and others.
WOODSIDE TAKES PRECAUTIONS
Warming waters off Australia can lead to cyclones between December and April. Cyclones interrupted mining operations last January.
Port Hedland on the northern Pilbara coast is used by BHP Billiton, Fortescue and Atlas Iron to ship hundreds of millions of tonnes of ore annually.
The nearby ports of Dampier and Cape Lambert are used by Rio Tinto, which last year shipped more than 200 million tonnes of iron ore.
Karratha is also a base for the $27 billion North West Shelf LNG project owned by Chevron Energy, Shell and Woodside Petroleum, as well as other oil and gas ventures.
Woodside said it was taking precautions to keep employees and facilities safe but would only comment on any change to its operations if there was a "material" affect on production.
Last March, Cyclone Lua halted output of about a quarter of Australia's daily oil production of 390,000 barrels as companies were forced to suspend offshore drilling and evacuate staff.
Wind speeds are calculated using a system categorising a cyclone's intensity on a scale of one to five.