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ENERGY NEWS
US
ENERGY REVIEW
The impact of Hurricane Ida on US oil and gas production and refining, the US policies regarding oil and gas development and containing emissions, a blockbuster deal in the Permian, and the lower-carbon ambitions of supermajor Chevron have been the key themes in the US oil and gas sector this past month. By Tsvetana Paraskova
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Hurricane Ida Disrupts US Oil, Gas, Refinery Output US oil, gas, and refining operations in the Gulf of Mexico and on the Gulf Coast have been disrupted since Hurricane Ida made a landfall in Louisiana at the end of August. At peak shut-ins in the Gulf of Mexico, operators had halted as much as 95% of the oil production in the federal offshore region. Nine refineries on the Gulf Coast also shut down, although most of them took less than three weeks to restart, but two refineries remained shut as of 20 September. Peak daily supply curtailment stood at 1.8 million barrels per day (bpd) in the Gulf of Mexico, according to Rystad Energy’s initial assessment of Hurricane Ida’s impact on US oil production and refinery capacity. The Gulf of Mexico has a peak daily production capacity of 1.9 million bpd. Nearly 2 million bpd of US Gulf Coast refining capacity was also estimated to be offline immediately after the storm hit.
www.ogv.energy I October 2021
Oil and gas production and refining operations were gradually coming online in the following weeks, but the lower supply contributed to oil and gas price spikes in September.
Nearly 2 million bpd of US Gulf Coast refining capacity was also estimated to be offline immediately after the storm hit.
Two refineries in eastern Louisiana remained shut from Hurricane Ida as of 20 September, accounting for about 500,000 bpd of refinery capacity, or around 3% of the total U.S. operable refining capacity, the US Department of Energy said in a situation report. Five refineries have returned to operational status, while two other refineries were in the process of restarting but remain below normal operating rates. As of 23 September, nearly a month after Ida made a landfall in Louisiana on 29 August, a total of 16% of the US Gulf of Mexico oil production remained shut in, as well as 24% of the region’s natural gas production, according to data from the US Bureau of Safety and Environmental Enforcement (BSEE).
Some of the shut-in production will not return until early 2022, as Shell said its damage assessment of the West Delta-143 (WD-143) offshore facilities from Hurricane Ida revealed significant structural damage.
The WD-143 facilities serve as the transfer station for production from Shell’s assets in the Mars corridor in the Gulf of Mexico to onshore crude and natural gas terminals. The company estimates that the WD-143 “A” platform facilities will be offline for repairs until the end of 2021, and that the facilities on the WD-143 “C” platform will be operational the fourth quarter of 2021. Given the timeline for repairs to WD-143, Shell expect to resume production from the Olympus platform, which flows across the WD-143 “C” platform, in the fourth quarter of 2021, and from the Mars and Ursa facilities, which flow across the WD-143 “A” platform, in the first quarter of 2022.
