Recovery and restoration of the Gulf of Mexico natural gas production to the pre-Katrina and pre-Rita levels is expected to take a fairly long period of time, lasting through the end of the year and into 2006, Interior Secretary Gale Norton said Tuesday.
The return of Gulf gas production post-Katrina followed the same path as seen after Hurricane Ivan, which struck the Gulf coast in September 2004, but the industry is seeing a “much slower response” in the wake of Hurricane Rita, she said during a press briefing at the National Press Club in Washington, DC. “It’s not coming back in the same quick fashion that we saw from Ivan and Katrina.”
About six weeks after Ivan last year, Norton noted that less than 10% of the Gulf oil and gas production remained offline. But production is just edging up after the latest back-to-back hurricanes. An estimated 72% (7.2 Bcf/d) of the gas production in the Gulf of Mexico still is shut in, along with 90% of the Gulf oil production (1,349,617 bbls/d). An estimated 342 platforms, or 42% of Gulf platforms, and 17 rigs remain evacuated.
Norton declined to speculate how much of the Gulf of Mexico gas production would still be offline on Nov. 1, the official start of the winter heating season. She said she expects the re-manning of undamaged platforms and restoring their operations to take an additional 10 days; restoring platforms that sustained minor damage would take several more weeks; and major repairs could take months and in some cases into next year. About 3,000 of the 4,000 platforms administered by the Minerals Management Service (MMS) were in the path of the hurricanes but only 109 were destroyed.
Norton attributed the slow recovery response to the fact that platform workers were affected by the twin storms (lost their homes); disruptions occurred to Gulf ports; onshore oil terminals and natural gas processing facilities sustained heavy damages; and drilling rigs were ripped from their anchor moorings and dragged along the sea floor, potentially damaging pipelines. “We…need to see more checking of pipelines before those are restored,” she said.
Although assessments of damage to offshore pipelines have been slow, Johnnie Burton, director of Interior’s MMS, said there was more damage caused to underwater pipelines by Ivan last year than by Katrina and Rita combined.
The “most significant” factor keeping offshore gas production offline is the damage to onshore gas processing facilities, Norton said. She estimates it will take several months for these facilities to be fully restored to service. In the meantime, Gulf gas production is bottled up. Following Katrina, the MMS said about 35% of the offshore gas production was shut in because of the damage to onshore processing facilities and pipelines.
The Department of Energy on Tuesday reported 21 gas processing plants in Texas, Louisiana and Mississippi remain shuttered either for lack of power, gas supplies or damage to the facilities themselves. DOE also reported 23 pipelines were damaged during Rita and 21 during Katrina, compared with 102 during Hurricane Ivan in September 2004. Ten of the plants with a total capacity of 5.4 Bcf/d lack power or gas supplies, and 11 of the plants with capacity of 7.7 Bcf/d are inactive because of damages.
Norton said a total of 108 older platforms were destroyed by Katrina and Rita, but she added these “were not significant producers,” accounting for just seven-tenths of one percent of the Gulf of Mexico gas production and 1.5% of the Gulf’s oil output. These platforms were “end-of-life” producers, Norton said, adding that she doesn’t expect most to be rebuilt. The majority of them were constructed prior to the agency upgrading its standards for platforms in 1988.
Only one platform that was built using the 1988 standards, Chevron Corp.’s Typhoon platform, was destroyed and four were severely damaged in the recent hurricane activity, Norton said. The Department of Interior suspects that a rig ripped from its moorings collided with Typhoon, causing the extensive damage. Not one of the platforms in the Gulf was capsized during the hurricanes, said MMS’ Burton, so “common sense tells us that something else…happened” to cause the damage.
A total of 50 platforms sustained significant damage during the hurricanes, of which four were major platforms, according to Norton. She noted that repairs currently are under way on the four platforms, with production expected to resume in a couple of months. Five offshore rigs were destroyed, while 19 were damaged.
At this stage, there is no official dollar estimate on the destruction to offshore oil and gas production facilities, but “it will clearly be in the billions of dollars,” Norton told reporters.
She reported that 19 mobile offshore drilling rigs were torn from their anchor moorings and created a “collision risk” to other platforms and pipelines along the ocean floor. Norton said the Interior Department has been studying the problem with the mooring systems of Mobile Offshore Drilling Units (MODUs), following Ivan last year. Norton said she has called a conference for Nov. 17 for industry executives and regulators to come together in Washington, DC to address the issue.
The MMS also has undertaken several actions to ease the process of returning domestic energy resources, including expediting the review of requests for temporary barging of oil or flaring of small amounts of natural gas; expediting the approval process for pipeline repairs; waiving cost recovery fees until January 2006; and maintaining continuous operations in the Gulf area despite evacuation and relocation of the MMS New Orleans office and damage to district offices.
On Tuesday the MMS reported Natural gas production grew more than 3%, with shut-in gas at 7.169 Bcf/d, or 71.69%, compared with 7.495 Bcf/d, or 74.95% reported on Monday, according to the Minerals Management Service. Seventy-five producers reported.
Cumulative gas shut in since Aug. 26 now stands at 226.551 Bcf, or 6.027% of the yearly gas production in the Gulf, which is about 3.65 Tcf.
Shut-in oil production on Tuesday was 1.349 million bbl/d, or 89.97% of the daily output (1.5 million bbl/d). Cumulative shut-in production since Aug. 26 is 46.457 million bbl, or 8.485% of the annual Gulf output, now 547.5 million bbl.
MMS also reported 41.76% of the 819 manned platforms and 12.69% of the 134 rigs currently operating in the Gulf remain evacuated.
Â©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2021 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |