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The Wall Street Journal: Status of Key Energy Facilities: Royal Dutch Shell reports "significant damage" at Mars oil, gas platform and posts photo showing collapse of topside structures; platform produces the Gulf Coast's benchmark high-sulfur crude -- the kind most used by refineries but most easily replaced by imports; also produces gas. Company also reports damage to WD-143 offshore pipeline hub, which could delay restoration of production at connecting platforms. Friday 2 September 2005
Hurricane Katrina plowed into the U.S. Gulf Coast energy industry, shutting eight major refineries and the bulk of U.S. Gulf of Mexico oil and natural gas production. Thursday saw some improvements in the supply situation. The Plantation Pipeline restored limited service on its fuel pipeline serving the Southeast, and Colonial Pipeline resumed limited service on its fuel pipeline serving the East Coast. President George W. Bush waived rules that prevent foreign-flagged vessels from moving fuel in U.S. waters. The Louisiana Offshore Oil Port and the Capline pipeline, two important arteries for moving imported crude oil to refineries inside and beyond the impact zone, also resumed limited service, which may allow refineries that weren't shut down to maintain runs. Three of the eight refineries shut down ahead of the storm now have set restart timetables, with two expecting to be back up within a week. Four refineries, however, appear likely to be off line for an extended period. The current status of key facilities is outlined below: Supply Shortage Warnings • Florida maintains warning that natural-gas supply cuts could lead to electricity shortages, and asks consumers to conserve.• Governors of North Carolina, Pennsylvania and Georgia call on residents to conserve gasoline, as stations in their states are running dry just days ahead of the Labor Day weekend. • Petroleum Traders Corp, the country's largest independent fuel wholesaler, says it has been cut off by BP PLC, largely cut off by Marathon Oil Corp. due to supply disruptions. • Exxon Mobil Corp. warns some fuel-supply disruptions are inevitable and is company keeping retail gasoline prices at company-owned stations unchanged. • Chevron Corp. is restricting supplies of gasoline to wholesalers from its East Coast terminals. • Royal Dutch Shell maintains a freeze on prices charged to fuel wholesalers at its terminals in storm-hit areas of Louisiana, Mississippi, Alabama and Florida. • Energy Department agrees to lend six million barrels of SPR oil to Exxon Mobil and one million barrels to Placid Refining; Valero Energy Corp. asks for 1.5 million barrels for three refineries, two in the Midwest. • EPA waives air-pollution regulations that make gasoline produced for use in the fall unusable in the summer; waiver applies through Sept. 15, when the summer rules expire anyway. • President George W. Bush temporarily waives restrictions banning the use of foreign-flagged ships to transport fuel in U.S. waters, saying there aren't enough U.S.-flagged vessels to do the job. Refineries Shut by Storm • Valero's 260,000 barrel-a-day St. Charles refinery in Norco, La., gets power back, but remains shut. Should restart in two weeks.• Motiva Enterprises says its 235,000 barrel-a-day Convent, La., refinery may restart within the week, as damage is light and staffing good; refinery has power and minor repairs are under way, but river access is questionable. The company's 225,000 barrel-a-day Norco, La., refinery remains shut and access to the facility remained limited Thursday, delaying a damage assessment. • Murphy Oil Corp. says after flyover that its 120,000 barrel-a-day Meraux, La., refinery looks less damaged than feared; facility still evacuated, partly flooded; company puts staff on the ground at the refinery. • Exxon Mobil's 183,000 barrel-a-day Chalmette, La., refinery remains shut and evacuated, though parish emergency personnel are relocating to the refinery, which is on relatively high ground; company has no information on damage or restart. • ConocoPhillips 255,000 barrel-a-day Alliance refinery in Belle Chasse, La., remains shut; no information on damage or restart • Marathon Oil Corp. starts heating up units at 245,000 barrel-a-day Garyville, La., refinery, says it could restart in 3-5 days. • Chevron Corp.'s 325,000 barrel-a-day Pascagoula, Miss., refinery remains shut and evacuated Refineries That Have Cut Runs • Exxon Mobil's 494,000 barrel-a-day Baton Rouge refinery is in "cutback mode," and operating at reduced rates due to supply problems.• Valero's 86,000 barrel-a-day Krotz Springs refinery is at reduced rates but could be back at full rates by the weekend after getting SPR oil. • Premcor's 190,000 barrel-a-day Memphis refinery is at reduced rates due to crude-oil supply snags. • ConocoPhillips's 239,400 barrel-a-day Lake Charles, La, refinery is running at reduced rates, due to a loss of crude-oil supply after Calcasieu Channel closed, DOE says. • BP says fuel output at some U.S. refineries, which it wouldn't name, is hurt by limitations on crude-oil supply after storm. • Total SA cuts runs at 180,000 barrel-a-day Port Arthur, Texas, refinery due to a problem with a hydrogen compressor, not the storm. • DOE said Thursday morning that a total of 12 refineries representing 17% of U.S. capacity at reduced rates due to crude-oil supply cuts; all refineries above included in that number; crude supplies, however, improving with key pipeline restarts, SPR oil. Fuel Pipelines, Terminals • Colonial Pipeline resumed service Wednesday on mainline from Houston to Greensboro, N.C.; flows at 38% of normal and were expected to rise to 61% on Thursday evening and 86% by early next week; restart possible after power restored at key Mississippi pump station.• Kinder Morgan Energy Partners' Plantation Pipeline restarted late Wednesday; flows are at a reduced 150,000 barrels a day, about 25% of usual average; restart accomplished by bypassing Collins, Miss., tank farm and pump station, which lack power; full rates possible once power is restored; no timetable. Crude Oil Supply to Refineries • Lousiana Offshore Oil Port restored limited service Wednesday. The company was hoping to unload crude oil from tankers and shipping it to storage at Clovelly and moving it from there to St. James interconnection with Capline, moving it from St James into Capline and to Exxon Mobil's Baton Rouge refinery, all at reduced rates; restart follows restoration of power using generators; LOOP moves about 1 million barrels a day of oil, 10% of U.S. imports.• Royal Dutch Shell's Capline pipeline system resumed operations Wednesday as power restored; operations at 75%; system moves 1.2 million barrels a day of crude oil from the Gulf of Mexico, imports from Gulf Coast to Midcontinent refiners. • Mississippi River traffic still halted for deep-draft vessels, open to barge traffic; river is a conduit for refineries like Exxon Mobil Baton Rouge to take crude oil in and send products out. Production • U.S. Minerals Management Service says 90% of daily oil output and 79% daily natural-gas output was shut down in Gulf of Mexico as of Wednesday; cumulative volumes shut in (Aug. 26 to morning of Aug. 31) are 7.44 million barrels of oil and 42.08 billion cubic feet of gas.• Port Fourchon has seen no severe flooding, but siltation is a concern, power is out; the key facility is needed to support the workers and equipment that will get Gulf platforms pumping again. • Royal Dutch Shell reports "significant damage" at Mars oil, gas platform and posts photo showing collapse of topside structures; platform produces the Gulf Coast's benchmark high-sulfur crude -- the kind most used by refineries but most easily replaced by imports; also produces gas. Company also reports damage to WD-143 offshore pipeline hub, which could delay restoration of production at connecting platforms. • Dominion Resources flyover finds only "dents and dings" at its six large production platforms, including Devils Tower. • Total SA reports no significant damage after flyover. • Newfield Exploration Co. says its A production platform at Main Pass 138 appears lost in the storm; facility was producing 1,500 barrels a day. • Murphy Oil says after flyover that no significant damage is apparent at its Medusa, Front Runner platforms. • Exxon says after flyover that damage to offshore structures looks minimal; 45,000 barrels a day of oil, 760 million cubic feet a day of gas remain shut in. • Anadarko Petroleum Corp. says its Marco Polo platform appears to have escaped serious damage; aerial inspection complete, crew now aboard assessing situation. • Kerr-McGee Corp. restarts 55,000 barrels a day of Gulf output, says all major facilities are intact after initial assessment; another 35,000 boe/d could be up once export pipelines operational; restoration of eastern, central Gulf output requires further assessment, restart of pipelines; total Gulf output 130,000 boe/d before storm. • U.S. Coast Guard reports five Gulf of Mexico rigs missing, two adrift, two listing and one grounded. Natural Gas Supply • Gas-industry concern shifts to gas processing plants; could bottle up recovering production, as the plants are used to bring 70% of Gulf of Mexico gas up to pipeline standards; four in particular are subject of concern: 1.3 billion cubic foot a day in Venice and 1.85 billion cubic foot a day Yscloskey facilities operated by Dynegy Inc., the 1.1 billion cubic foot a day Toca facility operated by Enterprise Products and the 1.3 billion Terrebonne facility.• Enbridge Inc. reports damage to 800 million cubic-foot-a-day Mississippi Canyon Corridor pipeline system. • Williams Cos. lifts force majeure on Transcontinental Pipeline, the key pipeline supplying consumers in the Northeast. • Enterprise Products Partners says three gas processing plants flooded, indicates facilities may be off line for a few weeks; plants are Toca, Yscloskey, Venice, processing total of 4.25 billion cubic-foot-a-day of gas; industry concerned such outages could bottle up recovering production, as the plants are used to bring Gulf of Mexico gas up to pipeline standards. 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