Energy Business

Updated Energy Production Outages From Hurricane Ike (XOM, CVX, COP, KMP, TPP, EPD, DO)

Oil_well_logo_2The effects of Hurricane Ike on the Gulf Coast are still being sorted out, but, so far reported infrastructure damage is light. That may change as producers, refiners, and pipeline operators begin more detailed examinations today.  But this is part of why oil prices have sold off so much despite the outages and interruptions.  Below you can see an update on which major oil and gas companies have released date regarding their facilities which were in Ike’s path.

Exxon Mobil (NYSE:XOM) began assessing damage to its productionfacilities yesterday, and has not yet reported any results. The Baytownrefinery does have electrical power, but the  Beaumont refinery doesnot. The company is installing portable generators in the Houston areato maintain distribution to emergency crews. Retail operations will bebrought back online as soon as conditions are safe and electricity isavailable.

Chevron (NYSE:CVX) reports that all its Gulf production platforms areshut-in, and its Galena Park terminal near Houston is also shutdown.The Pascagoula refinery is operating at full capacity, but the PortArthur lubricant plant is shut down. Like Exxon, Chevron is installingportable generators at key locations around Houston to try to maintainfuel availability.

The ConocoPhillips (NYSE:COP) refineries in Sweeny, Texas, has noelectricity. The Belle Chasse, Louisiana, refinery is preparing torestart following a shut down from Hurricane Gustav, and the LakeCharles refinery is operating at reduced rates as it comes back onlinefrom Gustav. The Mt. Belvieu plant is shut down. All Conoco’s onshoreand offshore production is shut down.

Pipeline operators are experiencing few problems with onshorepipelines, but so far there are few reports on damage to underwaterpipeline systems. Kinder Morgan (NYSE:KMP) experienced no shutdowns onany of its pipelines, but is experiencing reduced volumes due toreduced shipments from area refineries. Kinder Morgan’s liquidsterminal on the Houston Ship Channel experienced no major damage andexpects to resume shipments today.

Enterprise Products (NYSE:EPD) resumed operations Sunday at theIndependence Hub and Trail pipeline in the eastern Gulf of Mexico andexpects to return personnel to other offshore platforms today. Lack ofelectricity remains an issue for Enterprise and for Teppco (NYSE:TPP),which owns refined products terminals near Exxon’s Baytown and Beaumontrefineries. Neither Enterprise nor Teppco reports significant damage tofacilities.

Diamond Offshore (NYSE:DO) reports that its jack-up rig, Ocean Tower,lost its entire drilling package, including the derrick. Another unit,Ocean Drake, was in a Galveston shipyard and no damage assessment hasbeen done yet. Diamond’s other ten rigs are scheduled to be inspectedfor damage beginning today.

Reduced flows of refined products due to lack of electricity areexpected to cause prices for gasoline to jump. Some governors havethreatened to enact price-gouging penalties as gasoline prices rise.That, of course, will only make the supply problem worse.

Paul Ausick
September 15, 2008

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