Only a few flat Rockies points were left out of continuing gains in the rest of the cash market Wednesday. Initial evacuations of nonessential personnel were beginning at offshore installations as the expected path of Tropical Storm Gustav made it appear more likely that the storm will plow through the central Gulf of Mexico’s (GOM) production infrastructure.

And right behind Gustav, two more Atlantic systems have the potential to acquire a name, creating the possibility that there could be three named storms being tracked by early next week, AccuWeather.com Senior Meteorologist Ken Reeves told NGI Wednesday afternoon.

Tuesday’s run-up of 45.3 cents by September futures on their penultimate trading day also helped boost quotes for physical gas. Thursday’s cash market will also have positive screen guidance, although not nearly as much as it appeared Wednesday morning. The September natural gas contract peaked at $8.777, but it expired at $8.394, up 11.6 cents.

Gains ranged from about C5 cents at Westcoast Station 2 to about $1.30 at the Florida citygate as Florida Gas Transmission extended an Overage Alert Day into its seventh day Wednesday (see Transportation Notes). Not including the citygate the next-biggest increase was a little more than 85 cents at Florida Gas Zone 3. The upticks tended to be smallest in the West.

Tuesday evening’s passage over the southwestern peninsula of Haiti diminished Gustav’s maximum sustained winds to about 60 mph, leading to a status downgrade to tropical storm. And by late afternoon Wednesday the winds had subsided further to 50 mph. But the storm was expected to restrengthen over warm Caribbean waters to a hurricane again, possibly by the time it’s expected to thread the needle Thursday between Cuba and Jamaica.

The National Hurricane Center’s latest “five-day cone” of projected tracking had Gustav crossing the western end of Cuba sometime Saturday and emerging into the open GOM where it was expected to be nearing the southeastern corner of Louisiana on the afternoon of Labor Day. If that path turns out to be correct, the central GOM, along with New Orleans and the surrounding area, may face travails similar to those caused by Katrina almost exactly three years ago.

Accuweather.com’s most likely scenario has Gustav hitting the Gulf Coast somewhere between the extreme northeastern Texas coast and southeast Louisiana as a Category Three hurricane (winds 111-130 mph) Tuesday night. “It could get as strong as a Five” (winds over 155 mph) during its trip across the Gulf, as did Rita in 2005, then lose some steam as it hits the shoreline, Reeves said. If the other two tropical weather systems, one near Puerto Rico and another farther out in the Atlantic, materialize early next week it would be the first time since 2005 there was a trio of named storms. Gustav is expected to hit the Gulf in between the times that Katrina and Rita hit three years ago. “This is on average the busiest time,” Reeves said.

No one was reporting any shut-ins yet. Shell said it expected to bring in about 300 workers not essential to production and drilling operations Wednesday, but that would not have any production impact.

Chevron Corp., the largest leaseholder in the Gulf of Mexico, is watching the storm closely, said spokesman Mickey Driver. “The next 48 hours will say a whole lot about where this storm may be headed,” Driver said. Chevron’s extensive deepwater infrastructure includes the Blind Faith development, which is expected to ramp up this year. It also is developing the Tahiti and Perdido deepwater projects, which are scheduled to be completed in 2009 and 2010, respectively.

Anadarko Petroleum Corp., which has extensive Gulf of Mexico operations and operates Enterprise Products Partners LLC’s deepwater Independence Hub, was preparing to evacuate nonessential workers Wednesday. The Houston-based independent, which produces more than 150,000 boe/d net from the GOM, has 600 employees and contractors currently working offshore. “We are monitoring Gustav on a continuous basis and are preparing to begin evacuating our employees and contractors as the storm continues to move toward our operations,” said spokesman John Christiansen. Anadarko plans to provide continuous updates to its GOM operations on its website, www.anadarko.com, under “Weather Bulletins.”

BP plc’s Houston-based exploration arm is “monitoring the tropical activity of Gustav,” a spokesman said Tuesday. “BP is evacuating nonessential personnel from its platforms,” but “no shut-ins are planned at this time.” The London-based oil major didn’t expect to issue any additional advisories before Thursday.

Devon Energy Corp., which has, among other things, two deepwater rigs in the Gulf of Mexico, is “monitoring the storm in the event of preparing for evacuations,” said spokesperson Alesha Leemaster. “The storm’s path is uncertain at this point, but we will take action as necessary. We have planned no shut-ins at this time.”

A Wednesday morning posting on the ExxonMobil website (https://www.exxonmobil.com/corporate/) said, “Currently, there is no impact to production, and no personnel have been evacuated.”

“Several thousand” offshore personnel would be evacuated from offshore installations Wednesday, said the director of Port Fourchon on the Louisiana coast, according to a Bloomberg news report. Director Ted Falgout was quoted in the report as saying most companies would wait until Friday to make decisions on shutting in production. “If you look at models showing the storm’s track, it should scare you.”

The Weather 2000 consulting firm said it was quite possible that Gustav had already survived its “most challenging terrain obstacle” in Haiti. But like the ball in a pinball machine, “Gustav may approach, skim or clip Cuba and Jamaica in the days ahead.” The final likely obstacle before entering the Gulf of Mexico, Weather 2000 said, will be the western tip of Cuba and the Isla de la Juventud. However, “these have the least imposing mountains compared to the previously mentioned obstacles, and often do little more than cause a minor dip (or plateau) in sustained winds.”

At 5 p.m. EDT the center of Gustav was about 90 miles southeast of Guantanamo, Cuba, and moving slowly toward the west-northwest at nearly 3 mph.

NHC assigned development potential ratings of medium and low, respectively, Wednesday to a broad low-pressure area centered several hundred miles east-northeast of the northern Leeward Islands and a large tropical wave over the far eastern Atlantic several hundred miles west of the Cape Verde Islands.

Cooling load remained light overall, although the South is starting to heat up again after the remnants of Tropical Depression Fay had departed the region to move across the Appalachians and cool off the Mid-Atlantic. Much of the desert Southwest and inland California is recording triple-digit highs.

The Midwest and Rockies are in warming trends but won’t contribute much in extra cooling load with highs limited to the mid 80s Thursday in both Chicago and Denver. Fay-related rains should be arriving in the Northeast Thursday, lowering peak temperatures in most sections to the mid 70s.

Continued high linepack prompted El Paso to keep setting the probability of declaring a Strained Operating Condition or Critical Operating Condition to high.

The storm threat and stronger futures again Wednesday should keep spot prices rising Thursday, a Texas-based marketer said. For the same reasons September bidweek prices were up about 30 cents on average Wednesday, he said. Chicago citygate basis averaged around minus 40 cents, he added. As of Wednesday the Chicago index was looking “$7.97ish” to the marketer, but he said some fixed-price trading remaining to be done Thursday may push the index a little higher to $7.99-8.00 or so.

©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.