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Factbox: Tropical Storm Ida cuts US Gulf Coast oil production, refining operations

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Factbox: Tropical Storm Ida cuts US Gulf Coast oil production, refining operations

Roughly 75% of Louisiana refining capacity and nearly 95% of offshore US Gulf of Mexico oil production remained offline Aug. 30 as a result of Tropical Storm Ida, which caused widespread power outages after making landfall as a major Category 4 hurricane the prior day.

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According to estimates from S&P Global Platts Analytics, about 2.2 million b/d of refining capacity was offline, with the majority of plants without power from outside supplier Entergy.

As of about 1 pm CT Aug. 30, almost 1.2 million electric customers lacked service in Louisiana, Mississippi and Florida, according to various utilities plus PowerOutage.us.

Hurricane Ida cuts power to almost 1.2 million customers

Entergy had almost 874,000 customers offline in Louisiana and Mississippi.

The bulk of US Gulf of Mexico oil and gas output remained down Aug. 30 as E&P operators began inspecting platforms or made arrangements for flyover visuals.

According to the US Bureau of Safety and Environmental Enforcement, 1.72 million b/d of crude output and 2 Bcf/d of natural gas output was down, 94.5% and 93.5% of total US GOM production, respectively.

The return of offshore production could face delays as Port Fourchon, Louisiana took a near-direct hit from Ida. The port is a key hub of supplies and equipment, and a transportation point of entry and exit to and from the Gulf.

Port Fourchon also is the home of the Louisiana Offshore Oil Port's onshore facilities, which includes a booster station and Clovelly Dome Storage Terminal. LOOP, the only deepwater port in the US capable of loading VLCCs with crude, had suspended deliveries ahead of Ida, and could not be reached for comment Aug. 30.

Colonial Pipeline -- the primary fuel artery from Houston to the South and East Coast - closed ahead of Ida and said it would restart late Aug. 30 following a damage assessment.

The Colonial Pipeline outage boosted NYMEX RBOB gasoline futures, with the front-month crack spread to ICE Brent ending at $17.25/b Aug. 30, up from $16.32/b the prior day.

Crude futures were little moved, however, reflecting some confidence that the Gulf of Mexico offshore output would soon return.

PRICES

Oil

**Crude and refined product futures settled higher Aug. 30 as the market assessed the impacts of Hurricane Ida on US Gulf Coast energy infrastructure.

**NYMEX September RBOB settled up 3.85 cents at $2.3127/gal and September ULSD climbed 3.11 cents to settle at $2.1403/gal.

**NYMEX October WTI settled 47 cents higher at $69.21/b and ICE October Brent rallied 71 cents to settle at $73.41/b.

**Spot US Gulf Coast ULSD was assessed by S&P Global Platts at a five-month high of October ULSD futures minus 4.17 cents/gal, up 38 points.

**Spot offline Colonial Pipeline CBOB gasoline prices rose 3 cents to close at parity to NYMEX September RBOB as the pipeline temporarily shut as a precaution. CBOB prices climbed as high as September plus 1.10 cents/gal to start the day before losing steam.

**In New York Harbor, barge and Buckeye Pipeline RBOB gained 1.8 cents to September RBOB plus 80 points/gal, likely suggesting short-term concerns about Gulf Coast supply.

Shipping

**VLCC freight rates were rangebound Aug. 30 despite suspended operations at LOOP, as flows have been slow, with only six VLCCs leaving the terminal laden to Northeast Asia so far in 2021.

**Freight for the Aframax 70,000 mt US Gulf Coast-UK Continent benchmark route climbed 12.5% to Worldscale 90, or $15.34/mt, as weather delays in the Gulf of Mexico spurred on an already bullish freight market.

**Medium range clean tanker freight rates might decline this week as reduced exports due to closed refining capacity in Louisiana and Mississippi could lead to excessive tonnage in the Gulf of Mexico.

Natural gas

**Due in part to US LNG export uncertainties, spot LNG prices in the Asia-Pacific region rose further Aug. 30; the Platts JKM for October was assessed at $18.675/MMBtu.

**Benchmark gas prices at the Henry Hub dipped 14 cents on Aug. 30 to end trading around $4.21/MMBtu preliminary settlement data from S&P Global Platts showed.

**Henry Hub prompt-month futures lost about 7 cents to settle at $4.31/MMBtu; the winter contracts saw similar losses with the December, January and February calendar months ending the session around $4.45, $4.50 and $4.40/MMBtu, respectively, data from CME Group showed.

Power

**Power outages fell almost entirely within the Midcontinent Independent System Operator's footprint, where load peaked around 95.5 GW on Aug. 30, compared with a forecast of about 100.9 GW and an average peakload of 105.9 GW for the previous four Mondays in August.

**Despite relatively light power demand, the MISO Louisiana Hub real-time locational marginal price was about $42.35/MWh around 2 pm CT Aug. 30, compared with an on-peak average of less than $39.90/MWh for the previous four Mondays in August.

TRADE FLOWS

Oil

**Dirty tanker market participants are eyeing the impacts of offline refinery capacity, prompting ideas of a potential increase in tanker demand in the coming days as excess crude barrels need to be relocated.

**LOOP had closed operations ahead of Ida and could not be reached for comment Aug. 30.

**Ida hit Port Fourchon, which is the home of LOOP's onshore facilities, which includes a booster station and Clovelly Dome Storage Terminal.

**The Dome Terminal has a capacity of 40 million barrels of crude, according to LOOP.

**Ports of New Orleans, Houma and Pascagoula -- covering Alabama and Mississippi coasts -- were closed to inbound and outbound traffic as of Aug. 30..

Natural gas

**Louisiana's total demand sample, still subject to revision, sat at 1 Bcf/d on Aug. 30, down from a recent high of 1.6 Bcf/d on Aug. 24, amid power outages and disruptions to industrial demand at Gulf Coast refineries, petrochemical and other facilities, according to Platts Analytics.

**US LNG production did not appear to be impacted by Ida, though some shipments from two Gulf Coast facilities could be delayed before reaching Japan.

**One tanker was moored at Cheniere's Sabine Pass in southwest Louisiana on Aug. 30; the LNG tanker La Seine left Cameron LNG, south of Lake Charles, on Aug. 28.

INFRASTRUCTURE

Oil

**As of Aug. 30, 1.72 million b/d, or 94.6%, of Gulf of Mexico offshore crude oil production, or 94.6%, remained shut in, compared to 95.7% the prior day, the US Bureau of Safety and Environmental Enforcement said.

**According to BSEE, 2 Bcf/d of natural gas output was shut in, or 93.5%, down slightly from 93.8% the prior day.

**US Gulf operators evacuated 288 platforms, or 51.43% of the region's total, unchanged from Aug. 29, BSEE said.

**Shell said late Aug. 29 the US Coast Guard flew over its producing platforms in the area earlier in the day for a "general assessment" and found "visual confirmation" that its operated Mars, Olympus and Ursa platforms remained on location.

**Shell has five other US Gulf assets: Stones, Auger, Enchilada/Salsa and Appomattox, and said it has scheduled its own flyover Aug. 30 to assess the other assets that were in the path of the storm.

**BP, Chevron, BHP, Murphy Oil and Equinor all had confirmed production shut-ins prior to Ida's strike.

Refining

**According to estimates from S&P Global Platts Analytics, about 2.2 million b/d of refining capacity was offline as of Aug. 30, reflecting roughly 75% of the state's capacity.

**Louisiana's two largest refineries -- ExxonMobil's 520,000 b/d Baton Rouge plant and Marathon's 578,000 b/d Garyville refinery -- were shut down.

**ExxonMobil said its Baton Rouge plant did not sustain any significant damage and would begin to return to service once the company confirms it has access to feedstocks and third-party utilities.

**Marathon said Aug. 30 it was assessing a timeline to resume operations at Garyville.

**Entergy's power outage map showed the two Norco, Louisiana refineries shut ahead of Ida -- Shell's 230,611 b/d plant and Valero's 215,000 b/d plant -- have access to power.

Hurricane Ida zeros in on New Orleans-area refineries

Owner Location Capacity (b/d) Status
Louisiana
Citgo Lake Charles 418,000 operating
ExxonMobil Baton Rouge 517,700 shut down
Marathon Garyville 578,000 shut down
Phillips 66 Westlake 260,000 operating
Phillips 66 Belle Chasse 255,600 shut down
PBF Energy Chalmette 190,000 shut down
Shell Norco 227,400 shut down
Valero Meraux 125,000 shut down
Valero Norco 215,000 shut down
Mississippi
Chevron Pascagoula 356,440 uncertain

Pipelines

**Colonial Pipeline -- the primary fuel artery from Houston to the South and East Coast - said it would restart late Aug. 30 following a damage assessment.

Natural gas

**Louisiana took the largest hit from the storm with offshore output there remaining at just 13 MMcf/d on Aug. 30, off from an average 1.3 Bcf/d prior to the storm, according to Platts Analytics.

**Mississippi offshore production was estimated at zero, down from pre-storm levels around 650 MMcf/d.

**Louisiana Gulf Coast production was more than halved by Ida, with Aug. 30 sample estimates at 205 MMcf/d.

Power

**As of about 1 pm CT Aug. 30, almost 1.2 million electric customers lacked service in Florida, Louisiana and Mississippi, according to various utilities plus PowerOutage.us.

**Entergy had almost 874,000 customers offline in Louisiana and Mississippi, and it was followed by Cleco with more than 102,000 customers offline and the Dixie Electric Membership Corporation, with almost 80,000.

**Entergy's 1.2-GW Waterford-3 nuclear generating unit in Killona, Louisiana was shut Aug. 29 in advance of the storm's arrival and lost off-site electric power as Ida passed.

**Entergy's 992-MW River Bend nuclear unit in St. Francisville, Louisiana was operating at 35% of capacity at the request of the system operator.

**Entergy's 1.5-GW Grand Gulf-1 in Port Gibson, Mississippi, was operating at 100%, the US Nuclear Regulatory Commission said.