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Gas Workers Evacuate, Ships Flee as Cyclone Nears Australia

Tropical cyclone Lua is forecast to strengthen and unleash destructive winds and heavy rainfall on Australia’s northwest coast as Chevron Corp. (CVX) evacuates workers from gas projects and iron ore ships steam out to sea.

The storm is projected to become a category 3 cyclone from a category 2 at about 8 p.m. local time today, the Bureau of Meteorology said on its website. Woodside Petroleum Ltd. (WPL), Apache Corp. (APA) and Santos Ltd. (STO) have shut output at fields, halting more than a quarter of the country’s oil output.

The storm is 770 kilometers (478 miles) northwest of Port Hedland, used by BHP Billiton Ltd. (BHP) and Fortescue Metals Group Ltd. (FMG) to export iron ore. Operations at the harbor are shutting down and the last ship is expected to leave early tomorrow, Steed Farrell, a spokesman for the port, said by phone. Chevron evacuated workers from Barrow Island where it’s building the $37 billion Gorgon liquefied natural gas project and the Wheatstone LNG venture, the San Ramon California-based company said in an e-mailed statement.

“Lua is expected to intensify into a severe tropical cyclone tonight and remain severe as it approaches the coast,” the bureau said. “Destructive to very destructive winds with wind gusts in excess of 150 kilometers (93 miles) per hour are expected to develop in coastal areas near the centre of the cyclone” on March 17, it said. Storms are measured on a scale of one to five, with one being the weakest.

Field Closures

Lua is forecast to strengthen to a category 4 prior to crossing the coast, according to the bureau. Cyclone season in Australia typically runs from November to April.

Lua has caused 103,800 barrels a day of output to shut, compared with Australia’s daily production of about 393,000 barrels last year. Woodside closed fields at six locations including Vincent and Enfield. Apache shut its Stag project while Santos shuttered output at Mutineer-Exeter.

BHP Billiton is “monitoring all cyclone activity closely and will shut operations if we believe that is the safest course of action,” Melbourne-based spokeswoman Fiona Martin said in an e-mailed statement.

“Chevron Australia has initiated cyclone readiness plans relating to activities as a precautionary measure,” the company said in an e-mailed statement today. “Tying down of equipment is also occurring to secure sites. We are continuing to monitor the situation closely.”

To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net

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