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Oil, Gas Facilities Brace for Louisiana Floodwaters

Oil and gas companies with facilities in the Atchafalaya Basin of Louisiana are bracing for the arrival of floodwaters, but industry officials believe that the impact will be minimal and the recovery will be swift.

The U.S. Army Corps of Engineers so far has opened 11 gates of the Morganza Spillway to divert Mississippi River floodwaters away from Baton Rouge and New Orleans. The Corps opened the first two gates on Saturday, seven on Sunday and two on Monday.

"The industry has responded pretty well and quickly," Louisiana Oil & Gas Association (LOGA) President Don Briggs told NGI on Monday. "Our companies are prepared for it. They latched down, buttoned down and cleaned up their areas."

Phyllis Darensbourg, with the Louisiana Department of Natural Resources (DNR), confirmed for NGI on Monday that flooding may affect 2,264 oil and natural gas wells, which collectively produce 19,000 b/d of oil and 252.6 MMcf/d of natural gas, about 10% of the state's onshore total.

"The oil and gas companies gained a lot of experience from the flooding after [Hurricanes] Katrina and Rita," Briggs said. "One thing the companies learned was to put a certain amount of fluids in their tanks, not to drain them completely or else they will float away, break apart and cause spillage. The companies that left fluids in their tanks were the ones that survived the hurricanes the best."

Briggs said the facilities and equipment in the affected area should be able to withstand the flood and eventually return to normal operation once floodwaters recede.

Asked when the facilities might go back online, Briggs said, "that's going to be a big question. It all depends on what areas the wells are in. Wells in some areas could go back [in service] right away. A lot of those wells are in natural, environmentally sensitive areas and can only be reached by vessel. Some are near a road. It all depends on the extent [of the damage].

"We're comfortable the [oil and gas companies] will get through this, and when it's over they'll get right back to work."

Bill Mintz, spokesman for Houston-based Apache Corp., told NGI on Monday that the company wasn't sure its facilities would even be down during the coming flood.

"Right now we expect the impact to be minimal," Mintz said. "We don't know for sure because the water is not there yet. But we've been preparing for this. We expect the impact will primarily be some difficulty in moving people and equipment and supplies around."

El Paso Corp. spokesman Richard Wheatley told NGI on Monday that his company would post information about any point or facility outages to its website. He said two subsidiaries -- Tennessee Gas Pipeline and Southern Natural Gas -- would be the only El Paso businesses affected. As of Monday afternoon there was no flood news for either subsidiary.

"We started monitoring this at onset of the flooding issues," Wheatley said. "El Paso pipelines are continuing to monitor the forecasted flood levels of the Mississippi River, and the potential impacts that flood conditions could have on our receipt and delivery meters as well as facilities."

Briggs said when LOGA first learned of the potential flood there were concerns raised over an oilfield waste facility located on an island near Morgan City, LA.

"But they've drained all the cells where they store the mud before they inject it," Briggs said. "All of those cells and storage areas have been cleaned up and moved out, and the levees were increased another five to six feet to meet the high waters."

According to the Louisiana Department of Transportation & Development, high water has closed roads in Pointe Coupee, West Feliciana, East Baton Rouge, Tensas and Concordia parishes. Meanwhile, the DNR is also notifying operators and lease holders in the flood zone of the state's force majeure policy, and advising them to report damages and shut-ins within 90 days.

The Morganza Spillway was constructed in 1954 and connects the Mississippi River to the Atchafalaya Basin, a low-lying area of Louisiana that runs south to the Gulf of Mexico. The spillway has only been opened once previously, in 1973.

Briggs said he sees the Mississippi River every day during his commute to Baton Rouge. On Monday he said the river was near the top of the levee.

"That's a scary thing to see when the water is that close to the top," he said. "The damage it could do is unbelievable."

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