Mexico

El Paso Corp. said about 80 MMcfe/d of its Gulf of Mexico production shut in during Hurricanes Katrina and Rita will not come back online until the first quarter of 2006. Net production offshore totaled 205 MMcfe/d prior to Katrina and 170 MMcfe/d before Rita.

With hurricane-related shut-ins damping down nearly 7% of the Gulf of Mexico’s yearly natural gas production, liquefied natural gas (LNG) may be a “supply of last resort” for the coming winter heating season, according to an analysis by Cambridge Energy Research Associates (CERA). However, additional LNG imports may not be available because of global competition, the Massachusetts-based consultant reported.

Dominion said Monday that about 570 MMcfe/d of its offshore Gulf of Mexico gas production is still shut in due mainly to hurricane damage to downstream facilities that are not owned by Dominion. Its facilities were not significantly damaged by the hurricanes, the company said.

The pace of returning Gulf of Mexico and Gulf Coast gas production appeared to have quickened over the weekend, and gas futures and cash prices reflected that trend in light trading on Columbus Day (Thanksgiving Day in Canada). Cash points tumbled between a nickel and 30 cents in the Northeast, 15-45 cents in the Gulf Coast, and 10-55 cents in the Midwest and Midcontinent.

Newfield Exploration Co. said year-to-date, four major weather events have caused production deferrals in the Gulf of Mexico — Hurricanes Dennis, Katrina and Rita and Tropical Storm Arlene, and the full-year impact will result in the deferral of 18-20 Bcfe.

Enbridge reported Tuesday that it expects total gas flows on its five offshore Gulf of Mexico pipeline corridors to come close to pre-Hurricane Katrina levels of 2.7 Bcf/d by the end of the year, compared to only about 600 MMcf/d Tuesday (200 MMcf/d of which is from storage on Destin).

Total U.S. proved natural gas reserves rose 2% (or 3,469 Bcf) to 192,513 Bcf last year despite a 15% drop in Gulf of Mexico proved reserves, the Energy Information Administration (EIA) reported Tuesday in an advance summary of its 2004 annual report on U.S. Crude Oil, Natural Gas and Natural Gas Liquids Reserves, which will be released next month. The agency determined that U.S. reserve additions last year replaced 118% of 2004 dry gas production.

The slow recovery from Hurricanes Katrina and Rita in the Gulf Coast region and Gulf of Mexico continued Tuesday with total gas production shut-ins onshore and offshore finally dropping below 8 Bcf/d, according to a report from Golden, CO-based Bentek Energy. Bentek, which is tracking gas production nominations on the region’s major pipeline systems, said shuts-ins totaled about 7,766 MMcf/d on Tuesday, down from 8,003 MMcf/d on Monday and 8,208 MMcf/d on Sunday.

Natural gas output in the Gulf of Mexico remained at around 20% all week, with the Minerals Management Service (MMS) reporting Friday production outages equalling 79.4% — with shut-in production totaling 7.94 Bcf/d. The Sabine Pipe Line LLC’s force majeure also continued in effect for the Henry Hub gas delivery point, but some progress was reported.