Most Gulf Coast and Northeast prices were jumping by double-digit amounts Tuesday morning in response to growing offshore production shut-ins and the previous day’s screen spike. The gains tended to range from less than a dime at a few Gulf points to about 30 cents at FGT Zone 3, where Destin’s outage contributed greatly to supply shortfalls.

Midcontinent/Midwest numbers also rose, but generally by lesser amounts than elsewhere in the East, as cool weather prevailed in the market area. Western quotes ranged from flat in several cases to around 15 cents at Opal, San Juan and Pacific Northwest/Western Canada points.

Several forecasters’ projections have Tropical Storm Isidore regaining hurricane status and moving through the heart of the offshore South Louisiana production area. Its massive size was likely to also affect operations off the upper Texas Gulf Coast and east toward the Mobile Bay area.

Cautioning that the situation was extremely fluid and that supply losses were constantly rising throughout the day, several pipelines reported a total of 4.7 Bcf/d in offshore shut-ins (see breakdown below) to NGI Tuesday. The actual shut-in volume was undoubtedly quite a bit larger since no figures were available from Texas Eastern or three El Paso pipes (Tennessee, Sonat and ANR). A marketer estimated that normal Gulf of Mexico production totals about 13.5 Bcf/d.

As of 4 p.m. CDT, the National Hurricane Center (NHC) said Isidore was about 465 miles south of the Louisiana coast and “wobbling” northward at nearly 7 mph with little change in strength. A hurricane watch was in effect from Cameron, LA to Pascagoula, MS. Meanwhile, a tropical storm warning was declared from east of High Island, TX to Destin, FL. The NHC said tropical storm force winds extend outward 200 miles from the center of the storm. Squalls with tropical storm force winds were reported at the mouth of the Mississippi River in the early afternoon.

Tuesday afternoon the Minerals Management Service (MMS) said total production shut-ins reached 1.42 Bcf/d of gas and 155,000 bbl/d of oil. The MMS said its 3.2 Bcf/d gas curtailment total for Monday was incorrect and should have been 983 MMcf/d. However, MMS’s total for Tuesday fell far short of what pipelines were reporting. It may take several days to get accurate actual numbers on the situation in the Gulf of Mexico.

MMS said Tuesday that non-essential personnel had been evacuated from 245 platforms and 85 drilling rigs in the Gulf. The production companies that have reported information include Agip, Anadarko, BP, Burlington, Callon, ChevronTexaco, El Paso, Energy P, Energy R, Freeport McMoRan, Helis, Kerr-McGee, Linder, Marathon, Maritech, Newfield, Ocean, Panoco, PRS, Samedan, Seneca, TotalFinaElf, Unocal and W&T.

The following pipelines reported their share of the curtailments: Gulf South Pipeline, 500 MMcf/d; Columbia Gulf Transmission, 550 MMcf/d; Florida Gas, 600 MMcf/d; Transcontinental Gas Pipe Line, 1 Bcf/d; TGT, 100 MMcf/d; and for CMS Energy, 650 MMcf/d on Trunkline’s Terrebonne gathering system and 450 MMcf/d on the Sea Robin system. A Destin spokesman said all production was shut in on its system (it had reported normal throughput of about 850 MMcf/d in recent weeks) and that the entire pipeline and the Pascagoula, MS processing plant into which Destin delivers had shut down operations around 2:30 p.m. CDT Tuesday.

Sonat’s bulletin board said that as of Tuesday morning these receipt points “either have reduced production or have shut in production:” Main Pass 288, Main Pass 153, Main Pass 289-VK, Main Pass 68, Main Pass 72, Mississippi Canyon 194 and Venice Shell. Sonat parent firm El Paso Corp. said it had removed all personnel from offshore facilities and that its El Paso Production affiliate had shut down all “high liquids” (oil and condensate) output, but not dry gas. Throughput was reduced on Sonat and the company’s other two pipes with offshore connections (ANR and Tennessee), but no volume was available late Tuesday afternoon, a spokesman said. (A market source, extrapolating from shut-ins reported by other offshore Louisiana pipes, estimated that “at least” another 1-1.5 Bcf/d in supply losses were likely on the three El Paso lines.)

Texas Eastern was experiencing relatively “minimal” losses “because customers have been nominating less,” a spokeswoman said. Gas Control found it hard to reconcile the nomination cuts accurately with supply cuts, so no volume reductions were available Tuesday, she added.

A Gulf Coast marketer commented that the MMS error on reporting shut-ins Monday “makes it messy, but it will get even messier Wednesday.” The price trend was generally downward as the morning went on, though, he said. Reporting FGT Zone 3 prices in the mid to high $4.20s, he noted that the Destin outage bestowed a large premium on the FGT quotes. Transco’s Stations 65 and 85 also were very strong because of the lack of next-day supplies from Destin.

One trader, upon hearing of the tremendous shut-in revision for Monday by MMS, said sarcastically, “Oh, only a difference of about 2.2 B a day? Well, surely the gas market can shrug off a little error like that, right?”

Henry Hub traded at a premium of 10-14 cents to prompt-month futures for most of the morning, one source noted.

The western markets were considerably more sedate than those in the East. A producer said that even though western points feel little direct impact from tropical storms, “no one really cares about the rest of the market when so much is happening in the Gulf.” A high-linepack OFO by PG&E (see Transportation Notes) contributed greatly to keeping California prices flat, he said.

BP, ChevronTexaco, Shell Exploration and Production Co. and Anadarko Petroleum all said they were in the process of completing total evacuation of their Gulf of Mexico personnel Tuesday, including 1,500 to 2,000 BP employees and 2,000 ChevronTexaco employees. Anadarko reported production curtailments of 55,000 boe/d, and spokeswoman Lee Warren said employees have been evacuated from the 71 platforms that Anadarko operates.

“At this point we’re not taking a chance with people’s lives,” said BP spokesman Larry Thomas. “It’s better to err on the side of safety.” Thomas said about 300 people were scheduled to be evacuated on Tuesday. The company has been in the process of removing offshore personnel since Friday. “At this point, we still don’t know what the storm is going to do,” he noted. “Now that it’s taken this turn north, we have a lot of personnel in harm’s way. We’ll make another determination tomorrow as we get a better idea of where the storm is going to hit.”

Thomas said BP has kept a large contingent of helicopters under contract for the last week to ensure it would have enough to get its large number of employees and contractors off platforms if needed. He said the company would continuously evaluate whether it can re-man facilities.

Thomas also noted the company would be curtailing a certain amount of production, but he declined to reveal the amount. BP produces about 500,000 boe/d of gas and oil. “Production will be affected, but keep in mind we can remotely operate a lot of facilities so it’s hard to say exactly how much production will be affected.”

Shell said it was shutting in most of its 675,000 b/d of oil production and 2.7 Bcf/d of gas. Anadarko reported production curtailments of 55,000 boe/d.

ExxonMobil began evacuating non-essential personnel from the Gulf on Tuesday morning, said spokesman Ed Burwell. “We began to secure drilling operations at two location in the Gulf of Mexico as well. But at this time there has been no affect on production and we are continuing to closely monitor the storm.” ExxonMobil produces about 133,000 b/d of oil and 1.1 Bcf/d of gas and has about 350 Gulf personnel (normally it has about 550).

ChevronTexaco reported shut-ins at 160,000 b/d of oil and 550 MMcf/d of gas. Marathon Oil also said it was halting production on seven platforms that produce about 46,000 boe/d.

Ocean Energy said it also suspended all rig activity and shut down production in the Gulf. Ocean said the shutdown impacts production from 21 OEI-operated platforms as well as the company’s new deepwater production in the East Break complex. Total production volumes affected by the closure are in excess of 60,000 net boe/d.

After jumping 22 cents to $3.978 on Monday, the October gas futures contract moved sharply lower Tuesday (see related story) despite forecasts that Isidore would return to a category 1 or 2 hurricane before slamming into the central Gulf Coast late Wednesday or early Thursday. The October contract fell 23.6 cents on the day.

Tropical Storm Lili was slowing down and getting stronger Tuesday afternoon as it moved westward through the eastern Caribbean Sea after having passed over the Windward Islands. At 5 p.m. AST the storm was abut 415 miles south-southeast of Santo Domingo, Dominican Republic, according to the NHC. A gradual turn toward the west-northwest was expected, and Lili could become a hurricane by Wednesday.

Tropical Storm Kyle also was gaining strength but remained well out in the open Atlantic.

The start of October bidweek was pretty much neglected amid all the storm hubbub. “This was one of the slowest bidweek days I’ve ever seen,” a producer said. “So many producers were worried about their Gulf of Mexico supplies” that they didn’t have time to think about next-month business, he added.

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