HURRICANE SLAMS GULF OPERATIONS

Reports of damage by Hurricane Andrew escalated last week as operators stepped up inspections of oil and gas installations in the Gulf of Mexico.

By midweek, companies operating in the gulf and South Louisiana were beginning to agree that earlier assessments of damage only scratched the surface (OGJ, Aug. 31, p. 32).

Minerals Management Service's regional office in New Orleans by Aug. 31 had received reports of damage at 39 sites in the gulf. At the end of office hours Sept. 1, the number of reports had grown to 69.

Damage reports included scores of lost, toppled, or crippled platforms, pipeline ruptures, and oil sticks. By midweek the U.S. Coast Guard had received reports of 79 oil spills.

The Department of Energy said interruptions of gulf oil and gas production would be short term. But with each new report of damage, observers raised their estimates of curtailed oil and gas production and the length of time that could be needed to restore gulf production to pre-Andrew volumes.

Even platforms capable of resuming production in some instances were being curtailed because of damaged pipelines.

Offshore service companies said another 2-4 weeks could be needed to fully assess Andrew's wrath. Lack of personnel and equipment was slowing damage assessment and repair.

ANDREW'S FOCUS

The Ship Shoal and South Timbalier areas off Louisiana were hit hardest by the storm.

MMS by Sept. 2 had received 27 reports of damage to Ship Shoal installations and 20 reports of damage in South Timbalier. But damage also was reported at facilities in the Eugene Island, South Marsh Island, Grand Isle, South Pelto, West Delta, South Pass, and East Cameron areas.

Andrew toppled three Chevron U.S.A. Inc. production platforms and severed the production deck and equipment from a fourth, all in the South Timbalier area, interrupting combined production of 2,600 b/d of oil and 15 MMcfd of gas.

Chevron's Platform E was toppled on Block 152, Platform H on Block 135, and Platform A on Block 130. Production facilities were severed from Platform CA on Block 176.

Chevron estimated damage to the four installations at $30 million. An estimated $10 million will be needed to repair minor damage to other company structures in the gulf. Chevron said economics at each site will determine whether installations will be replaced or repaired or the sites abandoned.

Chevron by Sept. 1 had restored 1.1 bcfd of gas and 98,000 b/d of oil production in the gulf. The company shut in about 132,000 b/d of oil and 1.4 bcfd of gas for 2 days.

During the storm, Chevron supervisory control and data acquisition systems maintained production of about 230 MMcfd of gas, including 180 MMcfd in the western gulf.

The company expected by the end of last week to restore as much as 85% of its pre-Andrew production.

Louisiana Offshore Oil Port (LOOP) received only minor damage from Andrew. LOOP shut down marine operations Aug. 23 as Andrew began moving into the gulf. The facility resumed accepting tanker deliveries Aug. 29. Oil deliveries to customers from LOOP's shore base were interrupted Aug. 24-26.

LOOP throughput before the hurricane arrived was averaging about 850,000 b/d. That volume has been regained since full operations were resumed.

Only four tankers were prevented from offloading during the hurricane. LOOP estimated deliveries totaling about 2 million bbl of oil were delayed because of Andrew.

RESTORING PRODUCTION

Several other operators by midweek also had restored most of their gulf production.

Shell Offshore Inc. facilities received no significant damage, and the company by early last week had restored about 75% of its gulf-wide oil production and 90% of its gas production. Production in the central gulf was curtailed because of pipeline interruptions.

Before the storm, Shell's gulf-wide production averaged about 150,000 b/d of oil and 900 MMcfd of gas.

Shell had five mobile rigs at work in the gulf before the storm. Only one, the Zapata Saratoga semisubmersible on Mississippi Canyon 705, was drilling a wildcat.

After the storm, Saratoga was found on Grand Isle Block 47, about 50 miles from its drillsite. Shell and Zapata last week were considering whether to delay drilling on Mississippi Canyon 705 until damage to the Saratoga is assessed and repaired or to resume operations with an equivalent Zapata semisubmersible.

The four rigs drilling development wells for Shell had resumed operations by Sept. 1.

Operations at Shell's 215,000 b/cd Norco, La., refinery were curtailed through Aug. 26, but the plant was fully operational by the weekend of Aug. 29-30.

Phillips Petroleum Co. last week said about 25% of its 5,700 b/d net oil production and 15% of its 37 MMcfd net gas production in the gulf were curtailed due to hurricane damage. About 34 MMcfd of the gas and all of the curtailed oil production is from facilities operated by partners. Repairs are progressing, and production was expected to resume on some platforms late last week.

All of 44 of Phillips' operated platforms in the gulf are on production, and only one Phillips operated well is shut down.

Kerr-McGee Corp. experienced only minor damages in the hurricane.

As of Aug. 31 Kerr-McGee had restarted 90% of its gulf production, which averages 200 MMcfd of gas and 20,000 b/d of oil. The company expects the remainder of its gulf production to be back on line as soon as employees are able to determine that there is no further damage.

All of Kerr-McGee's 125 offshore personnel were onshore by 9 a.m. Aug. 25 before the storm struck, and the company's Lafayette and Morgan City offices were closed by noon due to lack of power. By then all the company's manually monitored facilities were shut down, although computer monitored units were shut in at the last minute.

DOWNSTREAM PROBLEM

Andrew forced Marathon Oil Co. to close its Lafayette, La., office for 2 days for lack of power. Andrew also heavily damaged a quarters building at Marathon's Berwick shore base, as well as a headquarters building and a heliport.

Marathon's Gulf of Mexico installations received only minor damage, and by Sept. 1 the company had restored its gulf production to near prehurricane levels. Gulf-wide, Marathon normally produces about 260 MMcfd of gas from 30 company operated platforms.

Problems with the integrity of 113 mile Eugene Island Pipeline System (EIPS), operated by Texaco Pipeline Inc., forced Marathon to shut in about 5,000 b/d of oil and 20 Mcfd of associated gas production from two platforms on Eugene Island Block 349, two platforms on Vermilion Block 369, and Vermilion Block 331.

Texaco said combined production of about 135,000 b/d of oil was shut in at 36 platforms because of the problem.

Technicians at a Texaco shore base near Houma, La., detected a possible leak, an aerial survey found an oil slick on South Pelto Block 8, and EIPS was shut in the evening of Aug. 31.

Texaco's oil spill response team was dispatched to deal with the slick, and at midweek most of the oil had dispersed or had been recovered.

Texaco temporarily plugged a leak Sept. 1 but expected to need as much as another week to complete permanent repairs.

TEXACO DAMAGES

By Sept. 1, Texaco U.S.A. still had shut in about 46.7 MMcfd of gas production in the central and eastern gulf and was producing 21 MMcfd.

Texaco had restored production at most sites in the eastern and central gulf, but problems stemming from Andrew remained at three sites:

On West Delta Block 109, at the mouth of the Mississippi River, mud slides severed a Chevron oil pipeline in 182 ft of water and about 1,500 ft from the Intracoastal Waterway. Texaco said it would be 3-5 days before divers could repair the damage, allowing Texaco to resume Block 109 production.
Before Andrew struck, the facility was handling about 10,000 b/d of oil and 20 MMcfd of gas. Chevron was overseeing repairs on the line.
About 25 MMcfd of gas production from a platform on South Timbalier Block 200, about 50 miles south of Terrebonne Parish, La., was interrupted by damage to a pipeline owned by Trunkline Gas Co., a subsidiary of Panhandle Eastern Pipeline Co.
Texaco said Block 200 production will be shut in until the pipeline resumes service, "and it looks to be out at least 2 months, possibly longer."
Texaco said Andrew's eye passed either directly over or very close to the South Timbalier 200 platform, flooding the generator room and ripping off a stairway.
On Ship Shoal Block 26, platform damage forced Texaco to shut in 1.7 MMcfd of gas production.

MOBIL OUTAGES

Mobil Exploration & Producing U.S. Inc. at midweek still had shut in about 250 MMcfd of gas production in the central gulf. The company expected to continue assessing damage throughout last week.

Mobil normally produces about 1 bcfd in the gulf and onshore coastal areas.

Mobil's marine and air operations base at Morgan City, La., was damaged but resumed full operations soon after Andrew blew through the area.

Mobil refineries at Beaumont, Tex., and Chalmette, La., at midweek had resumed full operations.

Mobil lost some production when Platform A overturned and broke apart in about 25 ft of water on Ship Shoal Block 72, 50 miles south of Morgan City.

Damage to Platform A also caused problems for Transcontinental Gas Pipe Line Corp. (TGPL), which was using the platform as a pipeline gathering facility.

When Andrew toppled Platform A small fires broke out on at least two pipelines serving the installation: an 8 in. line from Mobil's F Platform on South Pelto Block 11 and a 6 in. Odeco line from Ship Shoal Block 118. Those fires were extinguished by the evening of Aug. 30, but TGPL had not restored service by Sept. 2.

Before the hurricane, a 14 in. TGPL pipeline was transporting about 125 MMcfd of gas from Ship Shoal 72-A to an onshore main line interconnect near Houma, La. TGPL expected to reroute about 45 MMcfd of that volume beginning last week. The remaining volume was expected to remain unavailable pending repairs to pipeline interconnects on Block 72.

PIPELINE OPERATIONS

In other parts of the gulf, TGPL by Aug. 31 had told producers using its gas pipelines to come back on line whenever they were ready.

The only site where transportation service had not been restored on Transco's offshore system was on Ship Shoal 72.

Trunkline last week expected to restore 800 MMcfd of transportation capacity by Nov. 1 on its Terrebonne Offshore Pipeline System (TOPS) in the South Timbalier area.

Andrew damaged TOPS piping and toppled the T-21 valving platform on South Timbalier Block 72 and damaged the T-25 valving platform on Ship Shoal Block 139, knocking TOPS out of service.

About 400 MMcfd of TOPS throughput flows from T-21 to T-25.

Panhandle Eastern by the end of last week expected to replace about 400 MMcfd of TOPS capacity with gas from other receipt points on Trunkline's pipeline system. Another 400 MMcfd of capacity is to be restored this month when temporary repairs are completed on the T-25 platform.

Trunkline also is installing subsea piping on South Timbalier 72. Completion of that work is expected to restore by Nov. 1 the remaining 400 MMcfd of lost TOPS capacity.

LOST PRODUCTION

Calvin A. Kent, administrator of DOE's Energy Information Agency (EIA), said warnings of possible winter fuels shortages because of damage Andrew inflicted on gulf oil and gas facilities were "unjustifiably alarmist."

"Even in the short term, there is additional onshore capacity that can be brought on line to help alleviate temporary problems," Kent said.

Mirroring Kent's words, the Oklahoma Corporation Commission (OCC) Aug. 28 issued an order increasing state gas allowables to winter levels for 2 weeks to help avoid a shortage. The OCC's emergency order allows Oklahoma wells in prorated gas fields to produce as much as 40% of calculated absolute open flow. Oklahoma law sets the summer allowable at 25% of CAOF.

Lee Avery, president of Big Inch Marine Systems Inc., Houston, said gulf gas producers and transporters are under tremendous pressure to restore operations.

"We're guessing just like everybody else, but we think it could up to 100 days before oil and gas operations in the Gulf of Mexico are put back together," Avery said.

He said many large diameter gas pipelines in the gulf are "dead in the water." The condition of many smaller lateral lines won't be known until most large pipelines are flowing again.

Avery and Joyce Hurta, worldwide marketing manager at Oceaneering International Inc., Houston, said attrition of workers and equipment among U.S. offshore service companies in the past decade will hamper efforts to restore gulf operations.

Avery said many offshore service companies already have large work order backlogs.

Hurta said improved technology will help offset the lack of experienced workers. But repairs of seriously damaged offshore structures can't begin without adequate preparation.

OTHER DAMAGE REPORTS

Damage reports continued through Sept. 2. Among companies issuing statements about the status of their gulf operations:

Exxon Corp. had restored 75-80% of its pre-Andrew production and attributed continuing curtailment to downstream pipeline damage. Oil and condensate production had recovered to 60,000 b/d, 15,000 b/d less than before the storm. Gas production stood at 600 MMcfd, down about 200 MMcfd from pre-Andrew volumes.
A cooling tower was damaged at the company's Garden City gas processing plant in St. Mary Parish, La.
Mike Flynn, Exxon southeastern production manager, said, "Because of this damage, we are not processing gas for liquids recovery. But we are able to dehydrate for pipeline customers and are delivering volumes roughly half the prehurricane level of 107 MMcfd."
Murphy Oil Corp.'s preliminary estimates indicated about 6 months will be needed to restore prehurricane net production of 7,500 b/d of oil and 75 MMcfd of gas from facilities in the Ship Shoal, South Pelto, and South Timbalier areas. Net production of 4,000 b/d and 55 MMcfd could be restored in about I month.
Murphy's Meraux La., refinery was expected to return to normal capacity during the first half of September after experiencing start up difficulty following a shutdown Aug. 25 as a normal hurricane precaution. The plant had been operating at about 50% of capacity since Aug. 8 because of failure of a steam generator.
Fina Oil & Chemical Co. by midweek had brought back on line about 60 MMcfd of gas production in the gulf it had shut in as Andrew approached Louisiana.
But the company still was not receiving another 60 MMcfd of gas bought from other companies. As a result, Fina was advising interruptible customers that deliveries might be curtailed.
Fina's wetlands operations in coastal Louisiana survived a 5 ft surge of seawater as Andrew roared through the area. Surveys of properties by air and water revealed no significant damage to the wetlands or its wildlife.
Fina shut down its Port Arthur, Tex., refinery after that community's mayor called for an evacuation the day before Andrew arrived. Fina started bringing the plant back on line Aug. 26, the day after Andrew began moving inland from South Louisiana. Full operations were restored by the weekend of Aug. 29-30.
Fina's 1.9 billion lb/year Carrville, La., styrene plant continued operating throughout the storm. Also by last weekend, Fina had restarted its 640 million lb/year polystyrene operation in Carrville following shutdown as Andrew approached.
Freeport-McMoRan Resource Partners LP, New Orleans, had restored 75% of sulfur production at its Main Pass Block 299 and Caminada facilities after temporarily suspending operations at both sites as a hurricane precaution. Full production is expected to be restored this month.
Since resuming oil production on Main Pass 299 Aug. 27, flow has averaged more than 43,000 b/d. No damage was reported to Main Pass 200 platforms.
Cliffs Drilling Co., Houston, said full damages to its Marlin 3 mobile offshore production unit could not be determined until it was inspected more closely. The unit was aground on South Timbalier Block 32, about 50 miles northeast of Ship Shoal Block 263 where it was working under a contract with Union Pacific Resources Corp.