Storm damages continue to hamper U.S. Gulf of Mexico energy operations

Gulf offshore drilling operation
Gulf offshore drilling operation

Catastrophic damage to power lines and communications outages on Monday weighed on U.S. Gulf Coast refineries’ post-Hurricane Laura assessments and on offshore oil and gas production.Energy companies continued to inspect and restart offshore operations while onshore repairs were hampered by power outages. In Lake Charles, Louisiana, near where the storm made landfall early Thursday, Citgo Petroleum and Phillips 66 said reviews to their refineries could take days and neither could estimate restarts.

Offshore oil production was down by 989,000 barrels per day (bpd), or 53% of the region’s daily output. Natural gas was down by 41%, or 1.12 billion cubic feet per day (bcfd), the U.S. Department of Interior reported on Monday.

Up to 84% of oil and 60% of gas output was shut last week as a precaution but the oil markets shrugged off their storm premiums as Laura passed through the heart of the U.S. oil industry, sparing the bigger refineries in Houston and Beaumont, Texas.

Energy companies at midday had returned crews to 181 of the 310 evacuated platforms and drilling rigs, U.S. regulators said.

Power provider Entergy Corp said seven transmission lines serving the Lake Charles region were “catastrophically damaged” describing the destruction as “some of the most severe the company has experienced.”

Total SA was waiting for power to be restored at its 225,500 bpd Port Arthur, Texas, oil refinery, people familiar with plant operations said. The French oil major said it was taking measures to restart the refinery, which sits about 40 miles (64 km) west of where Laura made landfall.

Valero Energy Corp and Motiva Enterprises LLC , which also operate refineries in Port Arthur, were restoring equipment on Monday, sources familiar with its operations said. Motiva plans to resume output at its 607,000 plant early this week, the sources said. Both companies were not available for comment.

An offshore natural gas pipeline that serves four major U.S. Gulf of Mexico production platforms also remained out of commission, Enbridge Inc said, following Laura’s destructive path through the area.

Enbridge declared force majeure on the Garden Banks and Nautilus natural gas lines after inspecting facilities over the weekend. Nautilus resumed operations on Sunday.

The Garden Banks pipeline, a 1 bcfd natural gas line that connects the Auger, Baldpate, Enchilada, and Magnolia offshore production platforms to onshore lines, was shut due to a communications problem, the company said.

Enbridge expects to have an operating update later on Monday, a spokesman said.