Hurricanes

Finding ways to make the Gulf of Mexico (GOM) offshore oil and natural infrastructure more resilient during hurricanes has been on the minds of many in the energy industry over the course of the past year. Now, BP plc has come up with a $100 million plan to build the first-ever undersea fiber-optic cable linking oil and gas platforms. It would improve communications and could eventually alleviate some shut ins.

Benefiting from a rise in oil prices and the ramp-up of facilities damaged by hurricanes last year, Chevron Corp. on Friday surpassed Wall Street estimates with a 40% jump in third-quarter profit compared with the same period a year ago. Leading independent Chesapeake Energy Corp., meanwhile, managed to outsmart the natural gas market by successfully hedging against falling prices, while also boosting its U.S.-based gas production.

Given what happened to the industry last year with Hurricanes Rita and Katrina, it’s pretty easy to make a bull’s case for the natural gas market. In fact many industry prognosticators expect that once the current gas storage surplus is worked off, an underlying tight supply-demand balance will return, driving prices back into the stratosphere. But Stephen Thumb at consulting firm Energy Ventures Analysis in Arlington, VA, believes many experts are underestimating the impact that LNG will have on the U.S. market.

Given what happened to the industry last year with Hurricanes Rita and Katrina, it’s pretty easy to make a bull’s case for the natural gas market. In fact many industry prognosticators expect that once the current gas storage surplus is worked off, an underlying tight supply-demand balance will return, driving prices back into the stratosphere. But Stephen Thumb at consulting firm Energy Ventures Analysis in Arlington, VA, believes many experts are underestimating the impact that LNG will have on the U.S. market.

Due in part to the energy infrastructure damage and disruptions along the Gulf Coast in the aftermath of last year’s hurricanes, FERC anticipates that applications seeking to build 14 new natural gas storage projects will be filed over the next five years, the agency told Congress and the Bush administration Friday.

Due in part to the energy infrastructure damage and disruptions along the Gulf Coast in the aftermath of last year’s hurricanes, FERC anticipates that applications seeking to build 14 new natural gas storage projects will be filed over the next five years, the agency told Congress and the Bush administration Friday.

As it continues to restore its Gulf of Mexico (GOM) infrastructure damaged in last year’s hurricanes, Chevron Corp. said it now expects 3Q2006 U.S. natural gas liquids (NGL) and gas production volumes to increase 1.4% sequentially over 2Q2006.

With two massive hurricanes storming through many of the major oil and natural gas fields of the Gulf of Mexico in less than a month, about 78% of the daily natural gas production and 100% of the oil production in the Gulf of Mexico remained shut in Monday, according to Minerals Management Service (MMS), which compiled reports from 76 producers. MMS also reported that almost 93% of the 819 manned platforms and 75% of the 134 rigs also remained evacuated.

The American Gas Association (AGA) and American Public Gas Association (APGA) gave a thumbs-up to FERC’s proposed rule issued in the wake of Hurricanes Katrina and Rita that would beef up the Commission’s pipeline reporting requirements in the event of pipeline damage that disrupts supply. However, Nevada-based Pauite Pipeline said the rule is vague, overly broad and could sharply raise the reporting burden on pipeline companies while inundating the Commission with insignificant information on minor pipeline events.