Port Openings, Lost Production, Refinery Closures, and Pipelines Disruptions

Port Opening

``We have people on the platform and working to restore communication right now,'' said Mark Bugg, scheduling manager at New Orleans-based Loop LLC, the port operator. ``A tanker may dock this afternoon and possibly offload by this evening.''

The oil port stopped unloading tankers on Aug. 27 as Kristina approached. Port Fourchon in Louisiana, a staging area for workers who staff Gulf oil and natural-gas production platforms, opened this morning after damage was cleared.

Kerr-McGee Corp. said today that most of its facilities avoided serious damage and 55,000 barrels of daily oil and gas production was restored at production platforms.

About 30 percent of U.S. oil production comes from offshore platforms in the Gulf, while the region accounts for 24 percent of the country's gas output.

Lost Production:

The storm shut 1.37 million barrels of daily crude-oil output, according to the U.S. Minerals Management Service, which manages offshore resources. The storm shut 8.3 billion cubic feet a day of gas production, or 83 percent of normal production and less than the 8.8 billion reported yesterday.

Natural gas for October delivery fell 18.7 cents, or 1.6 percent, to close at $11.472 per million British thermal units in New York. Futures touched $12.30, the highest since the contract was introduced in 1990. Prices have more than doubled in the past year.

Eight refineries in Louisiana and Mississippi were closed, halting at least 1.79 million barrels a day of refining capacity.

Valero Energy Corp. estimated that its refinery in St. Charles, Louisiana, will resume operations in one to two weeks, after it was shut Aug. 28 because of the hurricane and lost power. The refinery has capacity to process 245,000 barrels of crude a day. Valero also slowed processing at its plant in Krotz Springs, Louisiana.

Refinery Closures:

ConocoPhillips, Chevron Corp., Motiva Enterprises LLC, Murphy Oil Corp., Marathon Oil Corp. and Chalmette Refining also closed plants over the weekend.

Shireman said major oil companies have stopped selling unbranded gasoline to independent retailers in Illinois and have cut back on contract allotments. He declined to say which companies were halting unbranded sales. The wholesale price he pays for gasoline has ``gone up about 80 cents a gallon in two days,'' he said.

Retail prices have now surpassed levels not seen for 25 years. Gasoline prices surged then because of the Iranian revolution of 1979 and the country's war against Iraq, helping send the U.S. economy into recession. Retail prices peaked at a nationwide average $1.38 a gallon in 1981, according to the Energy Department. That's about $2.95 in today's dollars.

Pipelines:

Traders are watching the Colonial Pipeline, the world's biggest network of petroleum-product pipelines, which carries gasoline and distillate fuels from Houston to New York harbor. Colonial Pipeline Co., owner of the network, said today two lines shut on Aug. 29 because of power failures will be started this weekend.

Distillates include heating oil and diesel.

``Once the refineries start making the product you have to transport it,'' said Mark Routt, a senior consultant at Energy Security Analysis, Inc. in Wakefield, Massachusetts. ``We have to watch the pipelines to the Midwest and the Northeast. The Northeast is less of an issue because we can get cargoes from Europe. Florida has a big problem because 60 to 70 percent of their gasoline is barged across the Gulf.''

``The biggest issue is getting power to these facilities,'' said Chris Ovrebo, a broker with FC Stone LLC in Eden Prairie, Minnesota.

``Most of these refineries didn't sustain heavy damage,'' he said. ``It's not going to take them six months to get back on line.''