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Factbox: US Gulf Coast oil producers, refiners restarting operations following Ida

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Factbox: US Gulf Coast oil producers, refiners restarting operations following Ida

Offshore Gulf of Mexico oil and gas producers, and onshore Louisiana refiners, were in the process of returning operations Sept. 1 following the passing of Hurricane Ida.

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However, continued widespread power outages and damages to onshore facilities have been slowing the return process.

As of Sept. 1, 1.455 million b/d of oil production remained shut-in, roughly 80% of total Gulf of Mexico output, according to the US Bureau of Safety and Environmental Enforcement. That was down from 94% Aug. 31.

Also, 1.87 Bcf/d of natural gas remained shut-in, or 83%, compared with 94.5% the prior day.

Heliport and marine terminal damages from Hurricane Ida are hampering crew transportation and the aerial assessments of deepwater US Gulf platforms.

Shell is building a temporary crew-change heliport in the days ahead because its primary heliport in Houma, Louisiana "sustained significant damage in the storm," it said late Aug. 31.

Houma, including the Port of Terrebonne and the Houma Navigation Canal, was one of the hardest hit areas by the storm.

Likewise, Ida made a direct hit Aug. 29 with its landfall at Port Fourchon, which is a major hub for maritime traffic to and from offshore facilities, and the associated Louisiana Offshore Oil Port.

Port Fourchon entered into "recovery mode" as of Aug. 31, but there were still substantial damages, and tenants are not yet being allowed in to assess damages.

Producer BHP, which operates the offshore Shenzi Field, and has non-operating interests in the Atlantis and Mad Dog fields, said it was temporarily moving its Fourchon shore base to Galveston, Texas.

Fortunately for the industry, there are alternate routes for transportation outside Port Fourchon and Houma where helicopters can provide services, S&P Global Platts Analytics analyst Sami Yahya said. These include Abbeville and Galliano, and elsewhere in Houma, among others.

"I think it will depend on the company and its resources that will determine its ability to send workers back offshore," Yahya said. "This may not be a huge constraint after all. A major energy company like Shell will likely be able to secure transportation without much trouble."

Roughly 2.1 million b/d of Louisiana refining capacity remained offline Sept. 1, according to S&P Global Platts estimates. However, that should decline soon as ExxonMobil said Sept. 1 it was beginning the restart of its 517,000 b/d Baton Rouge refinery.

PRICES

Oil

**NYMEX RBOB gasoline futures fell for the second consecutive day, settling down 3.10 cents at $2.1109/gal, primarily on supply assurances following the Aug. 30 restart of the Colonial Pipeline -- the primary fuel artery from Houston to the South and East Coast.

**NYMEX crude futures were little changed, although spot Mars crude continued to strengthen on offshore outages, assessed by S&P Global Platts at a 50 cents/b discount to NYMEX WTI, up from a $1.40/b discount Aug. 27, prior to the arrival of Ida.

**US Gulf Coast spot gasoline price differentials to NYMEX RBOB were mostly flat on the day to slightly lower.

Shipping

**The trans-Atlantic clean tanker market cooled off Sept. 1 following a flurry of activity the prior day, with S&P Global Platts assessing the UKC-USAC route at Worldscale 130, down 5 points.

Natural gas

**Cash Henry Hub soared 21 cents on Sept. 1 to reach a six-month high of $4.46/MMBtu, preliminary settlement data from S&P Global Platts showed.

**Henry Hub prompt-month futures similarly rose 24 cents to settle at $4.62/MMBtu; the winter contracts also climbed to fresh highs with the December, January and February calendar months ending the session around $4.75, $4.80 and $4.68/MMBtu, respectively, data from CME Group showed.

Power

**The MISO Louisiana Hub real-time on-peak locational marginal price was about $40.80/MWh around 2 pm CT Sept. 1, compared with the daily average of about $39.10/MWh for the previous four Wednesdays.

**With Ida affecting Pennsylvania, PJM West Hub day-ahead on-peak power for delivery Sept. 2 was up 75 cents on the day on ICE to $39.25/MWh, but this is down sharply from the $57.94/MWh that this package averaged for delivery on the previous four Thursdays.

TRADE FLOWS

Natural gas

**Louisiana's total demand sample, still subject to revision, sat at 946 MMcf/d Sept. 1, up from a low of around 295 MMcf Aug. 29, amid power outage and disruptions to industrial demand at Gulf Coast refineries, petrochemical and other facilities.

Power

**Power demand in the Midcontinent Independent System Operator, which covers most of the hardest-hit areas, has begun to recover, hitting a peak of 91.2 GW on Sept. 1, but this is well below the 110.9 GW average of the previous four Wednesdays in August.

INFRASTRUCTURE

Oil

**Shell said late Aug. 31 it planned to establish what it called a "temporary crew-change heliport," since the primary crew-change heliport in Houma, Louisiana suffered "significant damage" during the storm.

**Shell said it completed one damage assessment flyover thus far -- the Mars, Olympus and Ursa platforms are all intact and on location -- and had another one planned soon to check the rest of its facilities.

**Chevron said it has conducted overflights to assess its offshore facilities in the Gulf of Mexico, which "appear to be undamaged."

**Fourchon and Empire terminals, and their related pipeline systems, remain shut-in, Chevron said.

**BHP confirmed that no damage was identified at its Shenzi platform, and has temporarily relocated its shorebase from Port Fourchon to Galveston, Texas.

**One of the principal helicopter transport and damage assessment companies operating in the US Gulf, Bristow Group, said "several" of its facilities were damaged by Ida.

**Bristow has Louisiana locations in Houma, Galliano, Golden Meadow, New Orleans and Venice, all directly in Ida's path.

**Ports of New Orleans, Houma, Fourchon, LOOP remained closed to inbound and outbound traffic as of Sept. 1, according to the US Coast Guard.

**Port Fourchon entered into "recovery mode" as of Aug. 31, but there were still substantial damages, and tenants are not yet being allowed in to assess damages.

**The port will soon initiate a phased-in approach for allowing tenants to enter once the roadways are cleared of debris, Executive Director Chett Chiasson said in a statement.

**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 is also 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 said it was assessing the area for damage.

**LOOP could not be reached for comment Sept. 1.

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

**Colonial Pipeline -- the primary fuel artery from Houston to the South and East Coast - restarted late Aug. 30.

**ExxonMobil's Baton Rouge Fuels Terminal resumed operations Aug. 30.

**As of Sept. 1, 1.455 million b/d of the Gulf's crude oil production, roughly 80% of the region's roughly 1.8 million b/d, remained shut-in, compared with 94.6% Aug. 30, the US Bureau of Safety and Environmental Enforcement said.

**1.87 Bcf/d of natural gas output, or about 83% was shut-in Sept. 1, down from 94.5% the previous day. The Gulf's pre-storm gas output was about 2.2 Bcf/d.

**In all, 249 platforms remained evacuated in the US Gulf Sept. 1, roughly 44% of the region's total, BSEE said, compared with 288 platforms two days prior.

Refining

**According to estimates from S&P Global Platts, about 2.1 million b/d of refining capacity remained offline as of Sept. 1.

**ExxonMobil said it was restarting its 517,700 b/d refinery at Baton Rouge, Louisiana.

**Marathon Petroleum reported minor damage at its 578,000 b/d Garyville, Louisiana, refinery.

**"Due to a power outage in the area, we are using generators to power aspects of our operations that enable us to progress with repairs and assessments, and we continue working on a timeline for resuming operations," said Jamal Kheiry, Marathon Petroleum spokesman, in an email.

**Shell reported some damage from the storm at its 230,611 b/d Norco, Louisiana, refinery, while Phillips 66 reported some water had breached its 255,600 b/d Alliance refinery located outside New Orleans.

Louisiana refineries begin restarting after Ida

Owner

Location

Capacity (b/d)

Status

Louisiana

Citgo

Lake Charles

418,000

operating

ExxonMobil

Baton Rouge

517,700

restart in progress

Marathon

Garyville

578,000

no power/damage assessment

Phillips 66

Westlake

260,000

operating

Phillips 66

Belle Chasse

255,600

no power/damage assessment

PBF Energy

Chalmette

190,000

no power/damage assessment

Shell

Norco

227,400

no power/damage assessment

Valero

Meraux

125,000

no power/damage assessment

Valero

Norco

215,000

no power/damage assessment

Natural gas

Offshore Gulf of Mexico gas production has been slow to restart; S&P Global Platts Analytics data shows current volumes around 300 MMcf Sept. 1, down from the 2.7 Bcf/d averaged for the 30 days prior to Ida.

Louisiana and Mississippi offshore gas production remains largely off line, with Mississippi production at zero and Louisiana at just 26 MMcf/d Sept. 1, Platts Analytics data shows.

Power

More than 1 million electricity customers were left without power around 1 pm CT Sept. 1 as the remnants of Hurricane Ida continued from its initial landfall in Louisiana into the Northeastern US, particularly hitting Pennsylvania.

Entergy was able to turn on electricity for eastern New Orleans, focusing on essential services and medical facilities.

Entergy expects all of its Mississippi customers who are able to receive power to do so by the end of Sept. 2.

Cleco, the second-hardest-hit utility in Ida's wake, on Sept. 1 said it had found more than 100 poles on the ground, 400 broken crossarms, 65 damaged transformers, more than 70 spans of wire down and more than 500 trees on power lines.

Nevertheless, Cleco estimated that much of the areas affected by the storm could have service restored Sept. 1.

Entergy's 1.2-GW Waterford-3 nuclear generating unit in Killona, Louisiana remained shut Sept. 1 after being shut Aug. 29 in advance of the storm's arrival.

Entergy's 992-MW River Bend nuclear unit in St. Francisville, Louisiana was operating at 42% of capacity Sept. 1.