Gulf of Mexico gas production was rapidly returning to normal Monday, with only about 2.6 Bcf/d remaining curtailed at 11 a.m. compared to 9.9 Bcf/d of shut-ins on Friday, the Minerals Management Service (MMS) reported. Most pipelines reported near normal throughput conditions, and spot prices in the Gulf Coast region were mixed with some points rising and others falling a few cents. However, at most other locations outside of the Gulf Coast region, spot prices were at least a nickle higher and as much as 30 cents higher in California.

Relatively minor damage reports were trickling in from Gulf producers throughout the day. ExxonMobil reported damage to several onshore natural gas producing fields that will keep about 17 MMcf/d of gas curtailed for an extended period of time, said spokesman Bob Davis. He said about 50 MMcf/d of ExxonMobil production remained curtailed on Monday compared to a peak shut-in volume of 900 MMcf/d last week. About 10,000 b/d of oil also remains shut-in and most of that will remain curtailed until a damaged third-party pipeline can be repaired.

The MMS said the only other major report it had on Monday (in addition to the four damage reports made on Friday) was a Total Fina Elf platform that capsized in Eugene Island Block 275. The platform contained four wells that had already been plugged and were being abandoned.

Anadarko said it had no significant structural damage to platforms, but one of its rigs — the one owned by Rowan (see Daily GPI, Oct. 7) — capsized and is out of commission. About 54% of Anadarko’s production was back online on Monday, and that percentage was expected to rise to 70% by the end of the day, once its Hickory platform was returned to service. The company produces 250 MMcf/d of gas and 54,000 b/d of oil in the Gulf.

ChevronTexaco said Henry Hub throughput was still limited by area-wide power outages, and nominations continued to be filled on a best-efforts basis. Major electric utilities in Louisiana said Monday that over 20,000 customers were still without power. ChevronTexaco also said it still has 128,000 b/d of oil and 715 MMcf/d of gas shut in. “We have about 1,500 people back out there out of 2,100 personnel,” said a spokeswoman. She said no damage report has been completed yet.

Apache Corp. said it had about 51% of its gas production (380 MMcf/d) and 64% of its oil production (35,000 b/d) back. However, several facilities were damaged by Hurricane Lili. Those fields will not come back on line until repairs are made. Two onshore fields are off line because of a lack of electric service and accessibility.

Shell reported that it returned 1,072 personnel to its Gulf of Mexico facilities over the weekend and production had reached 362,000 b/d of oil and 1.5 Bcf/d of gas out of its total 1.9 Bcf/d Gulf production by Monday. And EOG Resources said it had some damage to production facilities in the Gulf, but no additional details were available yet. EOG is not the operator but has about 65 MMcf/d of net production coming out of the Gulf. On Monday, 116 Gulf platforms and four rigs remained evacuated compared to 748 platforms and 96 rigs on Friday, MMS said.

Few pipelines provided detailed information on Monday about remaining production curtailments because operations — aided by storage — were expected to be near normal by the end of the day on Gulf South, Texas Eastern, Columbia Gulf, Florida Gas, Transco and NGPL. However, Williams said 40 MMcf/d of production remained curtailed behind the Texas Gas system. Columbia Gulf said no actual shut-in numbers were available because pipeline telemetry still is not operating properly due to the power outages. Spokesman Bob Kiser said the pipeline still was operating on its own power because there still were power outages in southern Louisiana. “Some have been told the power will be out for a week,” he said. “It not only knocked down wires, it knocked down poles.”

Texas Eastern said it was having gas quality problems and some processing remained down, which was limiting throughput, but a spokeswoman could not provide a further details. Normal throughput is about 4.5 Bcf/d and last week the pipe had about 1 Bcf/d curtailed behind its system. “Storage is still being used to make up for any remaining production losses,” she said. Transco also was returning to normal except for a “few stragglers” whose production remained curtailed. Transco also said it was making up for lost volumes with storage.

“I think it will be a little while before it’s back to normal,” said one marketer. “Trading is more normal now than it was last week, but it’s still isn’t close to 100% back to normal.”

Intraday gas at Tetco M3 in the Northeast on Monday traded at $4.20-35, a huge premium to next day flow, noted one source. “It appears as if everyone went a little short for the weekend, and while they could get away with that for gas day Saturday and Sunday, the demand on Monday forced them out into the intra-day market.

The same story held true in the West, Southwest and Midwest on Monday. One source speculated that the weekend high inventory operational flow order on Pacific Gas & Electric’s intrastate pipeline system forced shippers to go into the weekend short to get their volumes in balance. When higher power demand surfaced on Monday and power prices ramped up, that prompted prices at the PG&E Citygate to jump as much as 30 cents higher in the low $3.40s. Basin and border quotes rose about a quarter, and sources reported tighter basis and premiums to balance-of-the-month quotes at some western locations.

“It is a little warmer out there, and prices really tanked going into the weekend. I think a lot of people went short into the weekend just to be safe, and I think an lot of the reason prices moved higher today was related to balancing,” said one trader.

Midwest quotes were flat to up a few pennies across the board. Chicago was a little stronger today than the field. It was a nickel behind the Henry Hub during bidweek, but had been trading 20-25 cents behind the Hub recently. On Monday it strengthened and came within a few cents of the Hub. “It’s probably more a function of the Hub softening in response to production coming back on line from the hurricane,” said a marketer. “Weather in the Southeast, MidAtlantic and Northeast is very mild and demand is very weak. It’s giving producers time to fix any damage from the storm. The mild weather probably will drive the market down this week. It looks like Nymex has leveled off, so I don’t see a whole lot changing this week.” Chicago was in the low $3.70-80s while the Henry Hub traded mainly in the high $3.70s.

“The hurricane is over, done with and gone. It’s back to normal business here,” said one Midcontinent/Midwest region trader. “Cash stayed pretty strong in the Midwest. I think a lot of that was due to people coming out of the weekend short. There was some heat load this morning, but a lot of it was people fixing their shorts. It got cooler over the weekend than some expected. I think some people missed their forecasts. But I don’t think the prices will stay up long. The screen probably will bounce around between $3.68 and $3.80.”

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