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MMS Continues Damage Assessment from Most Destructive Hurricane in 50 Years

It's been four-and-a-half months since Ivan, the most destructive hurricane for the industry in the last 50 years, swept through the Gulf of Mexico, but producers and pipeline operators were still sending diving crews out last week to assess pipeline and platform damage. Although MMS has set a June 1 deadline for pipe repairs to be completed, El Paso Corp. said repair work on some of its facilities could continue until next fall.

In a new report on Ivan's impact on Wednesday, the MMS said that while much progress has been made and 98% of the major oil and gas platforms in the Gulf are producing once again, there are still 16 platforms and 17 pipelines out of service and much work remains to be done.

The hurricane, which barreled down the eastern border of the Central Gulf of Mexico on Sept. 15, 2004, destroyed seven platforms and caused significant damage to 24 other platforms. Thirteen pipelines were damaged because of mudslides in the Mississippi River Delta, where El Paso's Southern Natural Gas pipeline is located. An additional four pipelines, with diameters greater than 10 inches, also were damaged and remain off line today.

As of Jan. 31, MMS estimates that 135,756 bbl/d of oil and about 489 MMcf/d of natural gas production remains shut-in. Cumulative shut in production as of Jan. 31, was 41.95 million bbl of oil (7% of annual Gulf production) and 165.8 Bcf of natural gas (3.7% of annual Gulf supply).

"If [Ivan] would have went more West, it would have been even worse," noted MMS spokesman Joe Trahan. "It's amazing. The pipeline damage is still being assessed. We have divers down there right now."

El Paso Corp.'s Joe Hollier noted that some of the more serious damage was caused by subsea mudslides. "Ivan moved everything so much on the bottom that it just made it a bear trying to figure out whose pipe was whose and, with a lot of them, where they went," he said.

A lot of the problem in doing repairs initially following Ivan's wrath was the continuing bad weather in the Gulf. High seas, 30 mph-plus winds and rain hindered repairs for at least a couple weeks. On Sept. 23, the remnants of Ivan somehow returned to the Gulf of Mexico and reformed into a tropical storm. And into the first week in October, more than 40 platforms and rigs were still evacuated.

"There also were so few dive boats and divers available that companies had to get in line to get down there and check things out," said Hollier. "It's been tough on a lot of companies to just try and be patient enough to use the repair equipment."

Trahan said Gulf pipeline operators now have a deadline of June 1 to repair every pipeline that's been damaged. "The reason for the June 1 completion date is -- guess what -- the start of a new hurricane season," he said. "We sent out a notice to leasees to let them all know this is the deadline. The National Weather Service has said there will be at least one similar category four hurricane like Ivan that will come through the Gulf this year. That's why we are pushing now."

However, El Paso Corp., which operates the two gas pipelines that sustained the most damage, Tennessee Gas Pipeline and Southern Natural Gas, said Wednesday that it is unlikely the company will even come close to meeting a June 1 repair deadline. Some of the repairs probably won't be completed until November, said Hollier.

"If MMS has put out a deadline for everything to be repaired by June 1, as of right now I don't see how we could meet that," he said. "As far as Southern Natural goes, what they are shooting for repairwise is July 1. On Tennessee, it's as late as November. Many of the repairs have been made but there are still problems upstream."

Tennessee's South Pass 55 platform in the Viosca Knoll area is ready to return to service but is still not receiving about 220 MMcf/d of production because of damage to third-party production facilities. It is expected to be out of service until mid-February. Tennessee also has a few other damaged facilities that are not expected to be repaired until July 1 and others that may not be returned until next fall.

Southern Natural still has 19 receipt points out of service. Six of those points in South Pass 60, representing about 50-60 MMcf/d, should be back in service by the end of February. Nine others on pipe facilities east of Main Pass 298 are expected back by July 1. The pipeline does not know when service will be restored to the four other receipt points.

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