Dominion said last week that about 570 MMcfe/d of its offshore Gulf of Mexico gas production was still shut in due mainly due to hurricane damage to downstream facilities that are not owned by Dominion. Its facilities were not significantly damaged by the hurricanes, the company said.
A total of 130 MMcfe/d of Dominion's production in South Louisiana and offshore in the Gulf is currently flowing, but the company could not forecast with any certainty when its remaining shut-in production would resume.
Prior to Hurricane Katrina, Dominion's production totaled 435 MMcfe/d. But the company had forecasted a major increase in October to 700 MMcfe/d with the addition of four previously announced deepwater projects, plus other planned completion activity.
Dominion said it has business interruption insurance for hurricane-related production delays. However, production delayed by Hurricane Katrina has a 30-day deductible period. Production delayed by Hurricane Rita has a 45-day deductible period. Dominion's business interruption insurance covers delays caused both by damage to its own production facilities and by damage to third-party facilities downstream. Despite production delays caused by these hurricanes, Dominion noted that its gas and oil reserves remain in the ground and are expected to be produced in the future.
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