Shutdown

U.S. Sen. Barbara Boxer (D-CA) and others are politicizing the almost 18-month shutdown of the San Onofre Nuclear Generating Station (SONGS) in Southern California, Edison International CEO Ted Craver said Wednesday. The “favorable economics” for restarting the 2,200 MW plant are diminishing with the passage of time and no action by federal regulators, he told financial analysts in New York City.

The House Friday passed by 296-121 a major omnibus spending bill to avert a shutdown of the federal government. Senate approval of the measure, which included nine different appropriations bills to fund agencies through fiscal 2012, was imminent. The bill contains several provisions that are favorable to the oil and natural gas industry, including one that would give the Interior Department authority over air quality compliance in the Arctic offshore.

The House Friday passed by a 296-121 vote a major omnibus spending bill to avert a shutdown of the federal government. Senate approval of the measure was to follow but had not come by press time Friday. The package, which combined nine different appropriations bills to fund agencies through fiscal 2012, contained several provisions that are favorable to the oil and natural gas industry, including one that would give the Interior Department authority over air quality compliance in the Arctic offshore.

Although Ruby Pipeline operator El Paso Corp. had indicated Tuesday that a systemwide shutdown might be ended as early as Wednesday, the in-service date has been shifted to sometime between Saturday and next Wednesday. Ruby said a full assessment of the scope of necessary repairs has been completed, and the longest lead item is for replacement of the 42-inch block valve. The restoration of service depends on the time required to secure and install the replacement valve.

El Paso said during its annual bottom-hole survey and emergency shutdown/Department of Transportation inspection at the Washington Ranch Storage Facility, scheduled for Monday through Sept. 19, its “operational flexibility will be extremely limited as no injection or withdrawal will be possible.” This is in addition to limitations from ongoing unscheduled anomaly remediations on Lines 1100, 1103 and 1110 between the Pecos River and Guadalupe compressor stations, El Paso said in an appeal to shippers asking them to stay balanced on transportation nominations during this time.

Southern noted that it will lose 64% of its available injection/withdrawal capability during a shutdown test of the Muldon (MS) Storage Field that begins Tuesday and runs through the following Monday. Based on current supplies and anticipated demand, Southern expected injection requirements Tuesday to exceed capability by about 75,000 Dth/d.

ConocoPhillips expects its 1Q2008 production to be “slightly below” 1.8 million boe/d following an unplanned shutdown at a nonoperated gas processing plant in the San Juan Basin, which was complicated by cold weather. Output in the final quarter of 2007 was 1.84 million boe/d. The Houston-based major issued an interim update ahead of the April 24 scheduled release of quarterly results. The producer noted that in the first three months of this year, the average price of natural gas climbed 19% from the same period a year ago while crude oil prices surged 69%. Henry Hub first-of-month prices in 1Q2008 averaged $8.03/Mcf, compared with $6.77 in 1Q2007. Gas prices in 4Q2007 averaged $6.97/Mcf. Realized domestic refining and marketing margins for 1Q2008 are expected to be “significantly lower” than margins in 4Q2007 because of the absence of a quarterly inventory benefit, higher crude costs relative to benchmarks and lower margins. Conoco said the prices for its “secondary products,” such as fuel oil, natural gas liquids and petroleum coke “did not increase in proportion to the cost of the feedstocks to produce them.” Debt balance for the major was estimated to be about $21.5 billion at the end of March. Stock repurchases in the first three months of this year were estimated at $2.5 billion.

ConocoPhillips expects its 1Q2008 production to be “slightly below” 1.8 million boe/d following an unplanned shutdown at a nonoperated gas processing plant in the San Juan Basin, which was complicated by cold weather. Output in the final quarter of 2007 was 1.84 million boe/d.

The BP America oil pipeline problem in Alaska that caused the partial shutdown of the largest oil field in the U.S. will put pipeline safety front and center when Congress returns from its hiatus next week, but it’s not expected to have a spill-over effect on natural gas pipelines, said an official with a major interstate gas pipeline group.