Mexico

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.

The U.S. Department of the Interior’s Minerals Management Service announced Tuesday it had received 422 bids from 51 companies on 346 tracts offered in the Western Gulf of Mexico Lease Sale 196. In the two new ultra-deepwater categories of royalty relief established, 26 bids were received in water depths from 1,600 to 2,000 meters and 60 bids were received in water depths greater than 2,000 meters. These new categories were established as a provision of the 2005 Energy Policy Act that was signed into law on August 8, 2005. Lease Sale 196 will take place today, August 17, 2005, at 9 a.m. in New Orleans. The sale will be webcast through the Offshore Oil Scouts Association at www.oosa.com.

New Orleans-based McMoRan Exploration Co. said this week that it has gauged more Gulf of Mexico deep shelf natural gas condensate discoveries and plans to soon ramp up production.

While all has been quiet on the storm front in the Gulf of Mexico over the past few weeks, recent revised forecasts are calling for more tropical storms and hurricanes than previously expected for the remainder of the 2005 Atlantic storm season.

BP said last week that the Thunder Horse platform, which is located in the Mississippi Canyon area of the Gulf of Mexico, is unlikely to begin commercial production before the end of 2005. The platform, which was expected to start producing a large amount of gas and oil later this year, was found listing 20 degrees following Hurricane Dennis’ trip through the Gulf earlier this month.

BP said Tuesday that the Thunder Horse platform, which is located in the Mississippi Canyon area of the Gulf of Mexico, is unlikely to begin commercial production before the end of 2005. The platform, which was expected to start producing a large amount of gas and oil later this year, was found listing 20 degrees following Hurricane Dennis’ trip through the Gulf earlier this month.

With Hurricane Emily looking like less and less of a threat for long-term Gulf of Mexico shut-ins, August natural gas futures traded within a thin 12-cent range Tuesday before settling at $7.586, down 6.6 cents on the day. While logging its second consecutive down session, the prompt month was unable to get below $7.50, which is acting as a support level.