DOE: Storms caused biggest disruption ever in gulf

By OGJ editors
HOUSTON, Aug. 2 -- Hurricanes Katrina and Rita caused the biggest disruptions ever experienced by oil and operations in the Gulf of Mexico, said the US Department of Energy in its final 24-page report this week on the impact of the two storms in August and September of 2005.

The US Minerals Management Service estimated 3,050 of the 4,000 offshore platforms and 22,000 of the 33,000 miles of pipelines in the US sector of the gulf were in the direct path of either Katrina or Rita. Moreover, damage inflicted by the two storms both offshore and onshore impacted 47 major gas processing plants and 17 NGL fractionation sites in 70 counties and parishes along the coasts of Texas, Louisiana, Mississippi, and Alabama—facilities with an aggregate processing capacity of 22.8 bcfd of gas.

The gulf's Outer Continental Shelf provides about 10 bcfd or 20% of all the gas produced in the US. When DOE stopped monitoring storm recovery efforts on Mar. 8, offshore gas production had returned to 9 bcfd, and all but 2 of the 47 gas processing plants in the area were operating, although at reduced flow levels in aggregate.

At that point, damage to the remaining production platforms, pipelines, and related infrastructure was expected to take several months to repair. In some cases, corporate decisions to repair or how to repair had not been made, or the priority to proceed was low, based on economic considerations. In its final statistics report issued June 21, MMS estimated 9.4% of daily gas production remained shut in as of June 19.

Damages abound
Hurricane Katrina, which made landfall near New Orleans on Aug. 29, 2005, entered the gulf as a Category 5 storm, with winds greater than 155 mph. As it plowed through the central gulf, it destroyed 44 platforms and damaged 20 others. It also damaged at least 100 pipelines in federal waters, 6 of which were 10-in. or larger, causing the shut-in of at least 8 gas processing plants.

Hurricane Rita, which made landfall near the Texas-Louisiana border on Sept. 24, 2005, was a Category 4 hurricane with winds of 131-155 mph when it entered the gulf. It destroyed 69 offshore platforms and damaged 32 others. It also damaged at least 83 offshore pipelines, 28 of which were large-diameter lines. As a consequence of both hurricanes, virtually all large gas processing plants from Galveston Bay, Tex., through Mississippi were shut down. A total of 27 plants were affected, or nearly 75% of total gas processing capacity along the Gulf Coast, said DOE.

The service industry supporting OCS gas production and deliveries was devastated by the hurricanes. "The network of workboats, crews, divers, supplies, and equipment needed to assess the damage and perform repairs to platforms and pipelines was shredded," DOE reported. "Docks and fleets were destroyed, electric power was lost on a wide-scale basis, and transportation fuels were not available for the boats, helicopters, and ground transportation vital to the recovery. Even the basic necessities of food, water, and shelter were not available in large areas of the hurricanes' impact zones. This damage to the support service industry hindered the natural gas industry's ability to recover from the storms."

Two LNG import terminals—the Panhandle Energy Trunkline LNG terminal in Lake Charles, La., and Excelerate Energy's offshore LNG operation, Gulf Gateway Energy Bridge—were in the paths of Katrina and Rita but suffered little damage. However, debris from Rita closed the navigation channel to the Lake Charles terminal for several days, and gas-gathering pipelines serving Gulf Gateway Energy Bridge LNG operations were affected by the storms.

"Recovery efforts have highlighted the complexity and inter-relatedness of the natural gas supply industry," DOE reported. It noted that offshore production platforms are connected to downstream facilities by a series of gathering pipelines to onshore processing plants and eventually to transmission lines for delivery to end users.

DOE said: "Damage to any of these components affects the others. For example, reduced production flow meant that some operational processing plants were inactive because they had no gas to process. In other cases, production flow had to be redirected around damaged processing plants to other facilities or to other pipelines with access to processing capability. At times pipeline flow directions were reversed and temporary bypasses were utilized. Since all aspects of the gulf natural gas delivery system—production, pipelines, and processing—are tied closely together, the recovery process for each of these three links is tied to the recovery of the other two links."

Assessments difficult
DOE staffers said they had difficulty obtaining damage assessments and information about recovery efforts throughout the whole process, from production to pipelines to processing plants. "This was because of concerns about competitive advantage, limiting the responses to requests for company-specific information, as well as the lack of information about the extent and effects of the damages given the enormous impacts of the hurricanes," they said.

The MMS released almost daily reports of evacuation and production shut-in statistics for platforms in the federal OCS from late August until mid-December. It then switched to weekly reports through the end of February of this year, followed by biweekly reports until May 3 and two additional reports on June 1 and June 21. DOE combined the MMS production data with data on pipeline and processing plant damages and repairs to provide daily reports on the status of the whole production and delivery process, including input from industry contacts and web-based pipeline informational postings.

In early May, when MMS issued its final damage assessment report, operators were still revising assessments and evaluating the economics of repair, abandonment, or expansion. On May 1, MMS reported that, based on additional industry investigations and reports, more than twice the number of pipelines were damaged than had been identified in January (457 vs. 183), and the number of damaged primary lines was revised from 64 to 101. MMS also reported that shut-in gas production was almost 1.3 bcfd as of May 3, or about 13% of daily gas production in the federal waters of the gulf.

Cumulative lost production totaled 803.6 bcf from August 26, 2005, through June 19, equivalent to about 22% of yearly gas production in the federal OCS in the gulf.

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