Cash prices were up 15-45 cents across the board again on Tuesday in response to the return of bullish sentiment on Nymex where gas futures soared 54.4 cents to $13.519. The first signs of winter in the West along with a somewhat bullish winter forecast by AccuWeather helped play on market fears of Gulf production shut-ins continuing deep into the winter.

The Minerals Management Service (MMS) basically reported more of the same on Tuesday in its first shut-in statistics of the week. The agency said offshore production rose only about 400 MMcf/d since Friday and 60% of the Gulf’s natural gas production remains shut in. Offshore gas production shut-ins totaled 6,041.82 MMcf/d compared to 6,441.39 MMcf/d on Friday.

Eight more platforms and two rigs were returned to service, but 266 platforms and four manned rigs remain evacuated based on reports from 68 companies, MMS said. Cumulative gas production shut-ins totaled 271.661 Bcf Tuesday (7.443% of the annual total from the offshore Gulf) compared to 246.471 Bcf on Friday. MMS said 1.062 million bbl of oil is still shut in, which is about 71% of the total oil production in the Gulf of Mexico.

Meanwhile, private consulting firm Bentek Energy of Golden, CO, said another 210 MMcf/d of onshore and offshore production was added on Tuesday. Bentek, which collects gas nominations data from pipeline bulletin boards four times a day, said a total of 6,138 MMcf/d of onshore and offshore gas production was still shut in on Tuesday compared to 6,348 on Monday.

Bentek said the largest improvement was seen on Transco where 1,162 MMcf/d was scheduled to flow on Tuesday compared to 1,077 MMcf/d on Monday. About 531 MMcf/d remains shut in upstream of Transco, which also has damage to its compressor station 44.

Total onshore and offshore production currently stands at about 7,682 MMcf/d compared to 13,820 MMcf/d on Aug. 26, according to Bentek data. Cumulative shut-ins since Aug. 26 now total 287.1 Bcf.

Gas processing remains the largest headache, but Duke Energy Field Services said two of its processing units, Port Arthur (206 MMcf/d) and Brookeland (100 MMcf/d) returned to service Tuesday, bringing 306 MMcf/d of processing capacity back into operation. The Department of Energy reported on Friday that 20 processing facilities with throughput of about 6.7 Bcf/d were out of service. DOE said it expected a number of the plants to return to service over the next four weeks, bringing about 2.86 Bcf/d of processing capability back online.

Among the facilities still out of service are Enterprise’s Sea Robin facility (950 MMcf/d), the Toca plant (1,100), Venice (1,300) and Yscloskey (1,850) BP’s Grand Chenier (950 MMcf/d) Williams’ Cameron Meadows (500 MMcf/d) and Columbia Gulf’s Pecan Island plant among others.

Columbia Gulf spokesman Kelly Merritt said 40-50 workers are attempting to get Pecan Island in Vermillion Parish, LA, back up and running as quickly as possible, but they have to remove several feet of mud, silt, snakes and dead fish before they can begin the process of replacing damaged electronic equipment and office facilities. He said just about everything that wasn’t anchored down was washed away, and all that remains is covered in muck and vegetation, not to mention miscellaneous slimy critters and varmints. It could be several weeks before the station is back in service.

Enterprise’s Doug Krenz, vice president of transportation, said Stingray Pipeline is dealing with a similar situation at its dehydration plant and liquids handling facility not far away in Johnson’s Bayou about a half-mile from the coast. “A lot of the houses that were on the beach are now up on our property in various pieces and under our slug catcher. It’s a mess. There is muck just layered over everything. We’ve brought rock in to reestablish the roads to the site and we have front-end loaders cleaning up all the debris.”

Krenz said Stingray should be back to normal by the end of the year with possibly up to 575 MMcf/d of throughput compared to 488 MMcf/d prior to Katrina. Mississippi Canyon is expected to be up and running by sometime in November, but its volumes will be dependent on repairs to the Venice processing plant and to production platforms Ursa, Mensa and Mars. Krenz said he expects throughput on Mississippi Canyon to be at two-thirds of pre-Katrina levels into 2006.

Transco said it was still working to repair Station 44 in Cameron, LA, also near Johnson’s Bayou. Volumes on Transco were still down between 500 and 600 MMcf/d Tuesday, a spokesman said. Shut-ins on Texas Eastern still totaled 510 MMcf/d and haven’t budged in many days. The slow return of facilities prompted resumption of the up-trend in the market on Tuesday.

“People apparently saw that $12.85 dip on Nymex yesterday as a chance to buy it,” said a Northeast marketer. “There’s a lot of fear about winter supply. You don’t want to go into winter and have this thing be at $20 and then find out the winter is going to be colder than normal. But it’s not all about supply and demand. You have a lot of technical traders in the market right now too.

“The market could continue to go up with any possibility of a cold winter. We’re getting some cold winter forecasts for the Northeast and that has spooked a few people. We’re also not out of the hurricane season yet. Storage levels are now at the five-year average without a surplus and we have 6 Bcf/d of gas shut in. It just has all the bullish factors behind it right now.”

AccuWeather said Tuesday that it expects the winter to be colder than normal in the populous Northeast. Above normal temperatures are expected across the Midcontinent, Midwest and West (see related story).

However, the weather is mild in the Midwest currently and that is helping depress basis spreads. “Chicago was up about 18 cents, but considering the Nymex was up 50 cents that’s pretty weak actually,” said a Midwest marketer. “There’s just no demand and we have cheap Texas gas that’s available along with gas from Alberta, so that’s keeping the spreads weak. Today the Chicago basis spread was minus a buck. It’s been weaker than that, but it had tightened to minus 60-65. Normally we are connected to Nymex but we haven’t been since the hurricanes.”

A Canadian producer said Huntington/Sumas prices were up about 40 cents Tuesday in response to Nymex and maintenance on Northwest Pipeline, which was limiting Rockies production from heading to the Pacific Northwest. “Crude went up and gas went up with it today and that is the main reason prices at Sumas are higher. I think we’ll go sideways for a while and be range bound, albeit, quite a wide range, until something significant changes. As long as storage numbers are weaker than the five-year average and shut-ins continue to slowly decline we are probably going to stay at these levels.”

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