Early indications so far show overall minor damage in the Gulf of Mexico from Hurricane Rita, the second major hurricane in less than a month and the third in a year (Hurricane Ivan in September 2004). Nevertheless, shut-in numbers remain high with many saying they still are assessing damage, some producers already are revising earnings guidance, and at least one is warning of a tight winter natural gas market.
Gulf of Mexico oil and natural gas output barely budged Tuesday, according to surveys by the Minerals Management Service (MMS), and Golden, CO-based consulting firm Bentek Energy. Scheduled gas production onshore and offshore Texas and Louisiana was even slightly lower on Tuesday than on Monday — 3,749 MMcf/d, compared with 3,888 MMcf/d, Bentek reported (see related story). The output was down from a pre-Katrina level of 13,820 MMcf/d. Bentek compiles its statistics in sweeps of pipeline electronic bulletin boards.
In the offshore, 78% of the daily gas production and 100% of the oil production in the Gulf was shut in, mirroring the figures issued by MMS on Monday. However, 76 producers reported about 10% more offshore rigs and platforms were manned compared to Monday.
Tuesday’s offshore shut-in gas totaled 7.856 Bcf/d, or about 78.6% of the average daily Gulf production (10 Bcf/d). Since August 26, when gas shut ins began for Hurricane Katrina, cumulative shut-in production totals 172.506 Bcf, or 4.726% of the yearly output in the Gulf (3.65 Tcf). Shut-in oil production totaled 1.53 million bbl/d, or 100% of the daily Gulf production. Since the shut-ins began before Katrina, about 36.36 million bbl, or 6.64% of the yearly oil output has been shut in (547.5 million bbl).
MMS also reported 83.4% of the 819 manned platforms were still evacuated — the number was 93% on Monday. And 65% of the 134 rigs operating remained evacuated; the number stood at 75% on Monday.
ExxonMobil Corp. President Rex Tillerson said it will take some time to make a full assessment of the producer’s Gulf of Mexico facilities, but he told journalists at the World Petroleum Congress in Johannesburg, South Africa late Monday, “the early indications” are the storm damage is “not very serious.” However, following up on remarks earlier in the day by Chairman Lee Raymond (see Daily GPI, Sept. 27), Tillerson noted the hurricane damage from Katrina and Rita may affect the U.S. natural gas market this winter.
“There’s no question that things could get tight this winter because of the interruptions we’ve had in the Gulf of Mexico,” Tillerson said.
Sabine Pipe Line continued a force majeure Tuesday at the Henry Hub, the gas industry’s most important market location and the delivery point for the natural gas futures market on the New York Mercantile Exchange. The pipeline is still assessing damage at their water-logged facilities (see related story).
Williams said the only report of “significant” damage found so far is at its Cameron Meadows natural gas processing plant near Johnson Bayou, LA. Transco also operates a pipeline compression and metering station in the vicinity, but it has been less affected than the processing plant, Williams said. Both facilities will require repairs, but the extent and timing are still being assessed. Also, initial reports for some offshore facilities involving underwater pipelines are not expected until additional offshore crews and equipment can be mobilized.
Enterprise Products Partners LLC, Dynegy Inc. and Duke Energy Field Services (DEFS) have reported nine gas processing plants with total capacity of at least 5.8 Bcf/d of gas out of service as of Tuesday afternoon. Actual throughput at the plants prior to Katrina was substantially less than their capacity totals, the companies said. The plants are out of service due either to damage assessments or actual damage from Rita or Katrina.
DEFS said Tuesday it was in the process of returning to service the Fullerton (65 MMcf/d), Artesia (70), Pecos Diamond (40) and Mobile Bay (600) gas processing facilities. Its Port Arthur (206 MMcf/d) and the Brookeland (100 MMcf/d) processing plants were damaged by Rita and did not return to service. Meanwhile, DEFS also still is assessing the potential damage to its Beaumont processing plant (100 MMcf/d). Its Minden (115) and George Gray facilities are expected back up in a few days.
DEFS’s Cipco gas gathering pipeline and Spindletop gas storage facility (750 MMcf/d of deliverability) in Jefferson County, TX, also were damaged by Rita and have not been returned to service.
Enterprise said that a visual inspection of the Indian Springs gas processing plant (120 MMcf/d) in Polk County, TX, indicated no material damage. However, the plant has been shut in due to area production curtailments and loss of utility power. Seven of Enterprise’s 10 significant Louisiana natural gas processing plants were returned to service prior to Rita. One of the remaining plants, the 15.5%-owned Sea Robin facility (950 MMcf/d) was impacted by flooding from Rita, but did not appear to have structural damage.
Meanwhile, repairs begun following Katrina have restarted at the other major plants. Repairs restarted at the Toca gas processing plant in Chalmette, LA, and new flooding from Rita did not impact the plant, Enterprise said. Repairs to the Toca II cryogenic processing train, which has a capacity of 250 MMcf/d, are expected to be completed in four weeks. Repairs to the Toca I processing train, which has a capacity of 850 MMcf/d, are expected to be completed in eight weeks, the company said.
In August, prior to Hurricane Katrina, the Toca plant was processing 500 MMcf/d of natural gas. Enterprise is working with the upstream pipelines and its producers to establish a timeline to resume service at Toca. Enterprise has a 60.4% ownership interest in the Toca plant.
Dynegy has not provided a clear estimate on how long it will take to complete repairs to the Yscloskey natural gas processing plant and the Venice processing plant and associated NGL fractionator. Enterprise, which owns a stake in Toca, Yscloskey and Venice, said that while the aggregate gas processing capacity of the three facilities is 4.25 Bcf/d, the average volume of gas being processed by the three plants in the August prior to Hurricane Katrina was 2 Bcf/d.
Southern Union Co. found “minor” damage at its Trunkline LNG terminal, located in Lake Charles, LA, but it said the terminal will remain shut down pending further inspection. Commercial power remained unavailable, but the terminal is running on its backup power source, which is sufficient to allow completion of required inspections and testing of sendout capability. The facility will return to full operation once commercial power is restored. and the agencies with authority over marine navigation reopen the Calcasieu Ship Channel.
Also, Southern Union’s Florida Gas Transmission is fully operational and is capable of transporting its full capacity into the Florida market, but production shut ins have significantly limited scheduled gas flows.
Trunkline Gas Co. found damage to its Longville, LA, compressor station but the station is being bypassed. Nominations through Longville Tuesday were limited to 230 MMcf/d. Trunkline’s Texas system experienced minimal damage and is expected to return to service at full capacity over the next several days, the company said.
Preliminary assessments of Trunkline’s offshore system revealed minimal damage. The South Marsh Island segment of Terrebonne was expected to return to service Tuesday. The remainder of the Terrebonne System is being inspected and will be returned to service as soon as possible. Detailed inspection of the Sea Robin system is continuing, but preliminary assessments indicated no significant damage. However, the Sea Robin system will not be able to return to full operation until producers do their own damage assessments and resume production.
On Tuesday, El Paso Corp. continued to assess damages to its onshore and offshore facilities and pipelines in Texas and Louisiana from Rita and Katrina. “While the assessment process continues, the majority of Rita-related damage to El Paso’s onshore pipeline facilities in East and Southeast Texas includes downed trees, broken windows, minor mechanical damage at various facilities, some communications and measurement equipment damage, and area power outages affecting some facilities,” El Paso said in a statement. “Damage assessments are now beginning in harder hit areas of southwestern Louisiana and areas offshore.”
El Paso suspended Katrina-related repair operations in areas south of New Orleans and offshore because of Rita, but they have started again. However, some repairs are being temporarily hampered by flooding in the Houma, LA, area and offshore weather conditions, El Paso said.
The company found numerous leaks following Katrina on its offshore Bluewater system and on other offshore facilities. The Port Sulphur Compressor Station (Station 527) on its 500 Line did not sustain any additional damage from Rita but the station still requires repair or replacement of liquid separation equipment, compressor units, and ancillary equipment from damage due to Katrina.
Tennessee Gas Pipeline confirmed a new leak on the 524G-100 line from Bay Marchand 5 to Leeville upstream of its 500 Line. Initial damage assessments also revealed moderate damage to the Starks, LA compressor (Station 820) and the Johnson Bayou Dehydration Plant on the 800 Line.
El Paso operates 77 platforms in the Gulf, and it is now transporting personnel back to the company’s 19 manned platforms and inspecting offshore facilities. In the Eastern Gulf all platforms have been manned and power restored. Production from these fields was expected to resume Tuesday pending notification from pipelines. In the Central and Western Gulf, the process of remanning and inspecting facilities continues. All of the 170 MMcfe/d of production El Paso was producing before the storm was shut in because of the storm.
In the Texas Gulf Coast and “Arklatex areas,” — in the region around Arkansas, Louisiana and Texas, El Paso’s production has been curtailed because of processing facility constraints. In the Texas Gulf Coast as much as 53 MMcfe/d had been shut in during the storm, and 40 MMcfe/d was still shut in Tuesday. In Arklatex, approximately 11 MMcfe/d is currently not producing because of processing facilities affected by the storm.
Stone Energy Corp., based in Lafayette, LA, said an initial flyover of its properties indicate the South Marsh Island 108 D platform and Vermilion Block 255 A and B platforms “have been lost.” Stone operates 115 structures in the Gulf, with net volumes of 18 MMcfe/d, and it said it was “evaluating alternatives for the lost platforms, including utilizing existing platforms.”
Stone also is assessing other operated-platform damage, although it may be several days before information is received on properties and pipelines operated by third parties. Plans have been made to return personnel to unaffected properties, which represents about 75-100 MMcfe/d. These volumes are expected to be back on line within a week, subject to the availability of pipeline and plant facilities.
Whiting Petroleum Corp., based in Denver, revised its earnings guidance because of hurricane damage. Whiting estimates it had 14 MMcfe/d of operated production and 10 MMcfe/d of non-operated production shut in for four days (100 MMcfe) because of Rita. Because of the losses, it revised its 3Q earnings guidance to range between 17.6-17.9 Bcfe, compared with 17.7-18.0 Bcfe in its prior guidance, and full-year 2005 production to range between 72.9-73.9 Bcfe, compared with 73.0-74.0 Bcfe in its prior guidance.
Drilling services operating in the Gulf appeared to have some of the greatest damage from Rita. Transocean Inc. reported its moored semisubmersible rig Transocean Marianas was forced off its drilling location during Rita and is grounded in shallow water at Eugene Island block 133, approximately 140 miles northwest of its pre-storm location. An initial assessment of the rig indicates significant damage to the unit’s mooring system, but a more complete rig inspection is ongoing. The well was secured and all personnel were safely evacuated before the arrival of the storm.
Also, the company reported that the moored semisubmersible rig Deepwater Nautilus, which sustained damage to its mooring system during Katrina and was undergoing repairs, was set adrift following the failure of a tow line utilized by a vessel engaged in towing the rig to a location away from the projected path of the storm. A partial crew on board the Deepwater Nautilus utilized the rig’s thruster-assist capabilities to navigate the unit to a location approximately 40 miles south of Grand Isle, LA., where the rig remains grounded. All crew members were safely evacuated.
Todco completed a visual inspection of its offshore Gulf and inland barge rig fleet. All rigs were accounted for during the visual inspection. While several rigs appear to have sustained minor damage, no rigs will be out of service for an extended period of time, the company said.
Dallas-based Ensco International Inc. completed aerial inspections, and all of its Gulf rigs appear to be stable, and none appear to have sustained any structural damage. The only apparent issues relate to a report that Ensco 90 is not in trim, the drill floor on Ensco 68 has shifted, and the Ensco 69 skid-off drilling package also has shifted on the oil company platform. Onboard inspection of the platform will be completed prior to repositioning the skid-off package.
Ensco returned personnel to several rigs, including Ensco 69, and plans to have personnel back on all rigs by Tuesday night. Ensco 7500, the company’s deepwater semisubmersible rig, is back on location and preparing to recommence operations. Ensco has 17 jackup rigs, one deepwater semisubmersible rig, and three platform rigs in the Gulf of Mexico.
Noble Corp. also reported four semisubmersibles operating in Green Canyon blocks — Therald Martin, Paul Romano, Amos Runner and Max Smith, broke away from their mooring lines as Rita passed. The company was able to track the location of the units during the storm using global positioning system (GPS) technology installed onboard each of the units. The Therald Martin, Paul Romano, Amos Runner and Max Smith moved approximately 89 miles, 118 miles, 75 miles and 123 miles, respectively, off their original locations. Noble assessment crews have been onboard each unit for preliminary evaluations of condition.
In addition, the Lorris Bouzigard semisubmersible broke at least one of its 10 mooring lines, with the remaining lines holding the unit in position about a mile off its original location, and the submersible Joe Alford moved about eight miles off its original location.
“The company is not able to make a complete assessment of the condition of the units until additional crew members and other technical personnel are able to conduct further surveys,” Noble said in a statement. “High levels of offshore drilling activity in recent periods have led to reduced availability and extended delivery times of some offshore drilling equipment, materials and supplies, which could result in delays in returning units to operational status. Latent damage to the units or delays in shipyard repair projects could also adversely impact schedules to return the units to operational status. Additional information will be released after further survey of the condition of the units.”
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