Katrina Impacts Refiners & Offshore Facilities


Some signs of the havoc Katrina caused:

? Diamond Offshore Drilling Inc. reported one missing rig. Another broke free from its moorings, but it was found about nine miles north of its original location.

? Newfield Exploration Co. said one of its production platforms disappeared entirely.

? Rowan Cos. said it believes a rig capsized and sunk off the coast of Louisiana.

? An oil drilling platform washed up onto Dauphin Island, a weekend retreat off the Alabama coast, but it was not known where the platform came from.

Valero Energy Corp. said its St. Charles refinery in Norco, La., which has capacity of 260,000 barrels a day, might not be restarted for another two weeks, but other big refiners in the region have yet to report the impact on their own facilities.

"The refiners that are in proximity to both the Mississippi River and Lake Pontchartrain are the ones that probably have flood damage," said William Veno, an analyst at Cambridge Energy Research Associates.

In addition to refineries and oil platforms, critical infrastructure that remained out of service included:

? the Louisiana Offshore Oil Port, the largest oil import terminal in the United States.

? the Colonial Pipeline, which transports refined products such as gasoline, heating oil and jet fuel from Houston to markets as far away as the Northeast.

? the Plantation Pipe Line, which transports fuel from refineries in Mississippi and Louisiana to consuming markets as far away as northern Virginia.

? the Capline pipeline system, which transports crude oil from the Gulf to the Midwest.
Many energy companies struggled just to visit their facilities.

Such is the case for Chevron Corp., which shut down its 325,000 barrel a day Pascagoula, Miss., refinery before Katrina's arrival. "We are hoping to get in there today, but that's the issue ? getting there," said company spokesman Michael Barrett.

BP PLC spokesman Scott Dean said the company managed to conduct aerial overflights of several deepwater oil and gas platforms and that the damage appeared to be minimal. The company also brought a few workers back to their offshore rigs to get a closer look. "I still can't speculate on when we'll resume production," he said.

But even if offshore platforms and rigs are ready to resume production, many may have to wait until onshore pipelines, refineries and processors are ready to take delivery of the oil and gas, industry officials said.

An Energy Department spokesman said there have been requests from two companies seeking loans of crude oil from the U.S. Strategic Petroleum Reserve. No decision has been made yet about whether to lend the oil, spokesman Craig Stevens said.

At least eight Gulf Coast refineries in the path of Hurricane Katrina have shut down or reduced operations, taking out anywhere from 8 percent to 10 percent of the nation's production capacity, according to company and federal reports.

Katrina, which struck the Gulf Coast as a Category 4 storm, was blamed for at least 55 deaths and the evacuation of more than 700 offshore platforms and rigs. It slammed into a major oil production hub at a time when producers worldwide were already struggling to cope.

Organization of Petroleum Exporting Countries secretary general Adnan Shihab-Eldin reiterated Tuesday that the group will supply extra barrels of crude oil to refiners if they want them. Previous OPEC pledges have done little to ease market fears over supply.

The U.S. Minerals Management Service said Monday that 95 percent of the region's oil output was out of service, with more than 4.6 million barrels of production lost since Friday. The agency said 88 percent of natural gas output was shut down, resulting in a loss of 25.4 billion cubic feet of lost production since Friday.
The Gulf of Mexico normally produces 2 million barrels of crude oil a day and about 10 billion cubic feet a day of natural gas.