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El Paso Estimates 15% of Gas Flows Still Shut In Post-Katrina

Damage to third-party pipelines, processing plants and production facilities still prevent about 15% of the pre-Hurricane Katrina Gulf production volumes from entering El Paso Corp.'s natural gas pipeline systems, the company reported on Thursday. Total flows on El Paso's Tennessee Gas Pipeline, Southern Natural Gas and ANR Pipeline systems remained down as of Dec. 16 by 770 MMcf/d to about 4.2 Bcf/d compared to what was flowing before Hurricane Katrina struck on Aug. 29.

The Minerals Management Service (MMS) reported Thursday total shut-in gas production stood at 1.962 Bcf/d, or 19.2% of the daily gas production in the Gulf. Cumulative shut-in gas was estimated at 547.073 Bcf, or about 14.98% of the annual gas production offshore, which is 3.65 Tcf.

Golden, CO-based Bentek Energy Inc., which has been tracking post-hurricane gas pipeline and processing data by monitoring and collecting nominations posted on individual pipeline electronic bulletin boards, estimated Friday overall shut-ins on- and offshore Louisiana and Texas were slightly lower than the MMS figure, at 1.45 Bcf/d. There remained 2.35 Bcf/d of gas shut in on- and offshore Louisiana, while in Texas, there was a gain of 901 MMcf/d (4.412 Bcf/d flowing on Friday, compared with 3.5 Bcf/d flowing Aug. 26).

Houston-based energy consultant John Gerdes said Friday hurricane damage overall is expected to materially depress all Gulf of Mexico and Gulf Coast gas production through late February -- with the assumption that 10% of output will be permanently lost.

El Paso said it is continuing to make progress in restoring its operations to pre-hurricane level flows. As of mid-December, it estimated ANR flows remained down by 200 MMcf/d from the pre-Katrina levels of 1.3 Bcf/d; Southern flows were down 170 MMcf/d from the pre-storm levels of 1.22 Bcf/d; and Tennessee was down by 400 MMcf/d from its pre-storm level of 2.45 Bcf/d.

Neither ANR nor Southern is constrained by processing, however, Tennessee "is still affected by a lack of third-party processing capabilities, but has pursued numerous options in order to optimize flows." Among other things, Tennessee has installed a new interconnect that provides access to process 120 MMcf/d at the Lowry processing plant at Lake Arthur. And the pipe has repaired most of its main lines in the Gulf of Mexico and continues to repair lateral lines, electronic equipment, and metering in various areas. Tennessee's facility recovery "will extend into 2006," El Paso estimated.

Tennessee is flowing on the East and West Legs, as well as the header of the Bluewater system. Some damaged lateral lines and metering equipment on the East Leg will be replaced next year. Also, Tennessee is repairing two turbine compressors at its Port Sulphur, LA Compressor Station in addition to other repairs. Plans call for the facilities to be back in operation by mid-January.

Southern's pipeline repairs continue offshore at various locations, including installation of a bypass around its damaged Main Pass 298 junction platform. The bypass is scheduled to be complete before the end of this year, and the platform will be removed. The company said ongoing system repairs on the ANR system should allow the pipe to restore throughput capability to 100% of pre-hurricane levels by mid-February.

Using its proprietary tracking system, Bentek reported the following shut-in totals as of Friday: Southern (385 MMcf/d); Transco (387 MMcf/d), Tennessee (973 MMcf/d), Sea Robin (104 MMcf/d), Trunkline 50 MMcf/d), Texas Eastern (209 MMcf/d), Mississippi Canyon (125 MMcf/d), Columbia Gulf (65 MMcf/d), Gulf South (89 MMcf/d), Texas Gas (30 MMcf/d), Nautilus (35 MMcf/d), Chandeleur (13 MMcf/d), Gulfstream (25 MMcf/d), and Venice (219 MMcf/d). Facilities with positive flow on Friday compared with pre-Katrina totals were Destin, up 137 MMcf/d; Florida Gas, 21 MMcf/d; Garden Banks, 52 MMcf/d; High Island, 3 MMcf/d, and Sabine, 7 MMcf/d. There also was 56 MMcf/d more flowing in the "other" category, Bentek, reported.

By state, Bentek estimated Louisiana's production losses as of Friday were 2.352 Bcf/d, with onshore operations down about 463 MMcf/d, and offshore operations off 1.774 Bcf/d. There also is an estimated drop of 98 MMcf/d in the federal offshore, and another 17 MMcf/d drop in the Alabama-Florida-Mississippi region.

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