THE WALL STREET JOURNAL/DOW JONES NEWSWIRES: UPDATE: Shell US Gulf Oil Pipelines Seen Up By Mid-Nov: “Royal Dutch/Shell Group (RD,SC) unit Shell Oil has begun repairs on three of its Gulf of Mexico oil pipelines and expects them to return to service within a month…” (ShellNews.net)

DOW JONES NEWSWIRES

Posted October 14, 2004

NEW YORK -- Royal Dutch/Shell Group (RD,SC) unit Shell Oil has begun repairs on three of its Gulf of Mexico oil pipelines and expects them to return to service within a month, according to a person familiar with Shell 's pipeline system.

The Odyssey, Na Kika and Delta lines are seen being back up as early as Nov. 1 but no later than mid-November, provided weather conditions are favorable, the source said.

Shell is trying to get its Na Kika line "to the point where we can test it and see if it holds the pressure" by the end of this week, the source said.

As for the overall progress on its damaged pipeline systems, Shell expects to see "significant progress by the end of October."

"We should know where we stand pretty well in the next week or two," the source said.

The weather conditions are central to repairs of these pipelines that lie underwater in the Main Pass area, offshore Louisiana.

For example, Shell had to interrupt pipeline repairs because of Tropical Storm Matthew's passage through the Gulf of Mexico late last week, said Fred Palmer, spokesman for Shell Exploration & Production in New Orleans.

Two of the damaged pipelines, Na Kika and Odyssey, are offshore gathering lines.

Delta, located southeast of New Orleans, is a trunk line that transports oil to onshore storage facilities on the Mississippi River, such as Empire. Its current capacity exceeds 240,000 barrels a day.

Damage to pipelines is keeping a substantial amount of oil and natural gas production that is otherwise ready to be restored to service off line in the Gulf of Mexico.

About a third of the oil production still shut down may be back online by the end of October, and the rest could take as long as six months to bring back, the U.S. Department of Interior's Minerals Management Service said late last week.

-By Katya Kazakina, Dow Jones Newswires; 201-938-4427; katya.kazakina@dowjones.com