The amount of shut-in Gulf of Mexico natural gas production dropped only 48 MMcf/d Thursday from levels on Wednesday, the Minerals Management Service (MMS) reported. And the Henry Hub, the delivery point for gas futures on the New York Mercantile Exchange, remained shut down for an eighth straight day, according to operator Sabine Pipeline.
Sabine, a unit of Chevron Corp., said the main station yard has been drained of standing water, but the ground continued to be saturated on Thursday. “Personnel are now able to access the interior of buildings and structures on drained portion of the complex,” Sabine noted. “Dewatering of remainder of Sabine’s Henry Hub complex continues.”
The MMS said cumulative offshore natural gas production shut-ins since Aug. 26 now total 188.540 Bcf, or 5.165% of the yearly Gulf output. Almost 80% of the natural gas, 7.979 Bcf/d and 99% of the oil, 1.479 bbl/d, produced offshore remained shut in on Thursday, based on reports from 76 producers.
Bentek Energy reported Thursday that Gulf Coast and Gulf of Mexico (onshore and offshore) gas production was up only about 13 MMcf/d Thursday to 5,161 MMcf/d compared to levels on Wednesday, according to gas nominations into the region’s pipelines (see related story).
Meanwhile, Duke Energy’s Egan salt cavern gas storage facility in Acadia Parish, LA and its Moss Bluff salt cavern in Liberty County, TX lifted force majeures and returned to full operation on Thursday, according to website postings. The facilities were returned to service on Monday, but injection capabilities were limited. Egan interconnects with eight pipelines and has the capacity to store 16 Bcf of working gas. Moss Bluff interconnects with five pipelines and also can store 16 Bcf.
Shut ins also plagued Louisiana. The flow of natural gas from 38 of Louisiana’s parishes has been cut to only 92.6 MMcf/d, or about 4.1% of its capacity of 2,235 MMcf/d, the Louisiana Department of Natural Resources (DNR) said Thursday. The agency said oil output in the parishes has only reached 4,759 bbl/d — 2.3% of capacity, which is about 203,000 bbl/d. Production capacity estimates for natural gas and crude oil are based on average flows reported from January to May 2005.
Also, the Louisiana Office of Conservation attempted to contact 55 intrastate pipeline operators in the hurricane-impacted parishes. On Thursday, 33 facilities within the state are shut in, four are partially shut in and 18 operators could not be contacted.
Only 162 wells — 2.7% of the 5,949 producing pre-Katrina — have been restored to production. DNR noted the status of 4,770 wells, or 80.2% of the region’s wells, hasn’t been reported by operators. Another 1,017 wells, or 17.1%, were reported to be shut in. Louisiana’s shut ins are in addition to the shut ins in federal waters off the coast and elsewhere in the Gulf, which are reported by the MMS. Louisiana has jurisdiction over oil and gas properties and rights out to three miles in the Gulf as a result of a 1976 U.S. Supreme Court decision, DNR said in its statement.
There were few new reports from offshore producers Thursday, however, Devon Energy Corp. said when combined, Hurricanes Katrina and Rita will cut 1.4 million boe — 60% natural gas — from its pre-Katrina forecast of 56 million boe. Companywide production is expected to now be about 54.6 million boe in the third quarter.
Onshore volumes represent 0.3 million boe of the reduction. Before Katrina hit, Devon produced 80,000 boe/d from its Gulf wells, which represented about 13% of its worldwide production. All of the company’s offshore output was suspended prior to Hurricane Rita. So far, about 30,000 boe/d of Devon’s offshore production has been restored. Restoration of the remaining volumes, including 9,000 boe/d suspended because of Katrina, “is dependent upon further damage assessments and repairs to Devon and third-party-operated facilities.”
Devon noted shut-downs of pipelines and third-party gas processing facilities in preparation for Rita caused it to suspend a portion of its onshore production, which has now been restored to pre-storm levels.
BP plc’s CEO John Browne said Thursday the company’s Thunder Horse platform in the Gulf — the largest semisubmersible of its kind in the world — will ramp “next year, sometime.” No definitive time was given by Browne, who spoke with reporters at the World Petroleum Congress in Johannesberg, South Africa.
Thunder Horse was damaged during Hurricane Dennis long before Katrina and Rita arrived, but Browne said the latest spat of bad weather delayed repairs. The massive platform originally was scheduled to begin production this fall (see Daily GPI, July 27). BP holds a 75% interest; ExxonMobil Corp. holds a 25% stake.
Callon Petroleum Co. reported minor damage to its major production facilities, but it warned production downtime would damage future output. Callon’s Medusa field was shut in before Katrina, and the company said restarting production will depend on the start up of third-party pipelines and processors. Limited production should resume at Callon’s Habanero field in the High Island area offshore”within the next 10 days.”
Houston-based independent Mariner Energy Inc. said it has restored 18 MMcfe/d of 60 MMcf/d to its offshore production rate, and most is expected to be back on line within “two to four weeks.” Based upon visual inspections, “damage to Mariner’s operated platforms appears minimal; however, production from three of the platforms remains shut in pending recommencement of operations at the associated onshore pipelines. First reports from operators of other facilities that handle our production indicate varying degrees of damage to their facilities, the full extent of which may not be known for some time. We are not aware of any damage to any of our subsea facilities or flow lines at this time.”
Among the rigs Mariner was using was the damaged Noble Joe Alford, a submersible rig engaged in drilling operations on in East Cameron Block 79. “We are currently evaluating the resulting damage to the rig and well. That operation as well as other planned operations will be delayed as a result of the hurricane.”
In related news, Citigroup cut its earnings estimates through 2007 for GlobalSantaFe because of its rig losses from the recent storms (see Daily GPI, Sept. 29). The expected increase in day rates won’t be enough to offset the surviving rig fleet, Citigroup said. GlobalSantaFe has confirmed the loss of nine jackup rigs because of Katrina and Rita.
Finally, to add insult to injury, the MMS staff, which was forced to move its main New Orleans operations to Houston — and then for a short time to Virginia — because of the storms, announced Thursday its Lake Charles, LA office will “likely remain closed” for at least a month. The problems relate to extensive power outages, MMS said.
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