Mexico

Just days after the natural gas industry sighed in relief after Hurricane Ophelia chose the Atlantic path instead of the Gulf of Mexico course, Tropical Storm Rita looks as if she might not be as accommodating. Fears over the storm’s projected Gulf path sent futures off to the races in Access trading Sunday night and again on Monday, with October natural gas settling $1.519 higher at $12.663, a new all-time prompt month record.

Despite continued stagnation in terms of shut-in returns from the Gulf of Mexico, October natural gas futures continued to explore lower on Tuesday, testing support lines and settling below $11 for the first time since Hurricane Katrina hit at $10.763, down 26.8 cents from Monday.

Natural gas production in the Gulf of Mexico inched up by 124.3 MMcf from Tuesday, leaving 4.04 Bcf of gas still shut-in following Hurricane Katrina, according to the latest Minerals Management Service (MMS) update, which was issued Wednesday. However, concerns were growing that potential pipeline damage and flooded natural gas processing plants in Louisiana may lead to gas shortages this winter.

Citing the continuing interruption of Gulf of Mexico supplies caused by Hurricane Katrina and warm weather in Florida, Gulfstream said Thursday an OFO that it had initiated Tuesday will remain in effect until further notice. See the bulletin board for the OFO’s conditions.

The Federal Energy Regulatory Commission gave regulated energy companies in the Gulf of Mexico and Gulf Coast region a little breathing room by extending any deadlines to Sept. 30 for companies affected by the hurricane who are participating in proceedings at the Commission and need an extension. FERC also is allowing companies to delay until Sept. 30 compliance with certain standards of conduct regulations, particularly reporting on each emergency that resulted in a deviation from the standards of conduct. Regulations usually require reporting of such incidents within 24 hours.

After disrupting and shutting in Gulf of Mexico oil and natural gas production areas, Hurricane Katrina continues to make her impact felt in both physical destruction of property and technical hang-ups in energy markets. The delivery committee of the New York Mercantile Exchange Inc. (NYMEX) convened Monday morning to review deliveries in progress related to the NYMEX Division natural gas futures contract for August 2005.

While the development of Tropical Storm Katrina scared natural gas futures on Wednesday above $10 on concerns over Gulf of Mexico production, one weather forecasting company warned that the industry might be getting a little ahead of itself.

While it will be approximately three months until final results are known, the U.S. Minerals Management Service’s (MMS) is ranking its Western Gulf of Mexico Oil and Gas Lease Sale 196 — which was held Wednesday morning in New Orleans — as a success, with a number of companies making a strong showing (see Daily GPI, Aug. 18).

Sponsors of multiple new LNG import terminal projects who took the line of least resistance in siting their terminals along the Gulf of Mexico Coast are facing another problem, that of tanker congestion from ships using the same access waterway or port, according to an article in Poten & Partners monthly publication, LNG in World Markets.