Storm Recovery Update

The US Minerals Management Service reported 225 of the 717 manned platforms and 7 of the 121 mobile rigs operating in the US sector of the Gulf of Mexico were still without crews as of midday Sept. 22. Officials said 76.6% of the oil and 65.5% of the gas usually produced from offshore federal leases have been shut in.

The Department of Energy said 9 refineries (total capacity of 2.27 million b/d) remain shut down as a result of Hurricane Ike, while another 12 refineries (total capacity of 2.95 million b/d) are running at reduced rates. Officials said 8 natural gas processing plants (total capacity of 5.08 bcfd) in Texas and Louisiana were shut down; another 14 plants (6.28 bcfd total capacity) were restarting or operating at reduced runs. Also, 7% of Texas remained without electrical power as of Sept. 22.

Shell Oil Co. now has returned 1,210 employees offshore and increased production over the weekend to 32,000 b/d of oil equivalent (total gross) from a few Shell-operated facilities. The company expects to ramp up production, "depending on repairs and downstream oil and gas infrastructure readiness."

Shell Pipeline said most of the Delta pipeline system is delivering crude. In its Central Gulf pipeline corridor, the Amberjack pipeline north of the South Timbalier 301 platform is back in service and flowing oil from limited production platforms. Work continues to restore other connecting pipelines. Mars and Ursa pipelines are standing by for prestart testing when associated production facilities are ready.

Company officials are developing plans to reroute the Auger pipeline system around the damaged Eugene Island 331 platform. As a temporary measure to bring production on quickly, Shell is looking at redirecting flow from the Auger pipeline to another system in the area.

The Eugene Island pipeline remains down pending repairs at a third-party pump station and attempts to isolate subsea connections to damaged producer platforms. The Boxer pipeline is down pending start-up of the Eugene Island pipeline and the closure of a sub-sea valve to isolate a damaged producer platform.

In the western pipeline corridor, Cougar pipeline is down pending repairs at a producer platform. Work is progressing to restart the Central Gulf gathering system.

Onshore, the Shell-operated Capline Crude Oil Pipeline System is operating generally at scheduled rates. Deliveries continue at limited rates into Port Arthur and Houston areas on the eastern end of the Houma-to-Houston Crude Oil System. Finished products systems in Houston have power and are making deliveries to connecting truck terminals and pipelines. In Port Arthur, finished product systems are using portable generators to make limited deliveries from inventory.

Shell's Deer Park, Tex., refinery and chemical plant are progressing toward restart with units being brought online in a planned and sequential manner. Production and distribution of motor fuels is expected to begin Sept. 23, with normal operating rates expected by this weekend.

Motiva Enterprises LLC (a Shell-Saudi Aramco joint venture) reported power has been restored at its Port Arthur refinery. Production of gasoline and other products is expected to begin this week. Meanwhile, workers continue to blend gasoline and diesel from existing inventories for shipments into the pipeline distribution system.

Motiva's Norco, La., refinery is operating at planned rates, and its Convent, La., refinery is making gasoline and other products at 90% of capacity. The company plans to return production to normal rates over the next couple of days.

Shell's chemical plant at Norco is operating at planned rates, as is its chemical facility in Mobile. The chemical plat at Geismar, La., is still in start up sequence and is supplying limited product to customers from existing inventory.