UPDATE 3-U.S. Gulf Coast oil companies return to Ida recovery as Nicholas recedes

| Wed, 15 Sep 2021 16:21:15 GMT

(Adds status of pipelines, ports)

By Liz Hampton and Jessica Resnick-Ault

Sept 15 (Reuters) – U.S. Gulf energy companies have been able to quickly restore pipeline service and electricity after Hurricane Nicholas passed through https://www.reuters.com/world/us/nicholas-strengthens-into-hurricane-pounds-coastal-texas-louisiana-with-rain-2021-09-14 Texas, allowing them to resume efforts to repair the significant damage a previous storm, Ida, caused two weeks ago.

Nicholas, downgraded to a tropical depression late on Tuesday, caused rain, minor flooding and power outages in Texas and Louisiana, where some refineries remained offline https://www.reuters.com/world/us/us-gulf-coast-energy-companies-struggle-restart-production-after-ida-hit-2021-09-03 in the wake of Category-4 Hurricane Ida. The earlier storm has kept shut a large portion of the U.S. Gulf offshore oil and gas output.

Colonial Pipeline, the largest U.S. fuel line, resumed gasoline and diesel shipments on Wednesday after Nicholas passed, while the Exxon Mobil-operated HOOPS pipeline system, which carries crude from large offshore production facilities to Texas, is expected to restart later on Wednesday, the company said.

Royal Dutch Shell plans to resume production at its Perdido offshore oil platform, shut ahead of Nicholas, once power is fully restored to HOOPS.

U.S. liquefied natural gas producer Freeport LNG’s export plant in Texas was expected to take in more natural gas on Wednesday, according to pipeline data from Refinitiv, signaling the facility was in process of returning to service after a power outage from Nicholas.

The Texas ports that had closed for vessel traffic ahead of the storm also reopened on Wednesday, the U.S. Coast Guard said.


Even though operational resumptions after the storm have been faster this time, markets are very tight, said Infrastructure Capital Advisors analyst Andrew Meleney, as gasoline and other refined product stocks are near five-year lows. Oil prices rose about 2% on Wednesday after a larger-than-expected decline in U.S. crude inventories.

More than 39% of the U.S. Gulf of Mexico’s production of crude and natural gas remained shut on Tuesday, the offshore drilling regulator said.

The storm has removed 25 million barrels of oil and 30.5 billion cubic feet of natural gas from the market. About 720,000 barrels per day (bpd) of crude production and 1.075 billion cubic feet per day of gas remain offline.

“The tropical storm that just came through slowed down recovery efforts from Hurricane Ida,” said Tony Headrick, energy market analyst at CHS Hedging. “We will continue to see the effects from Ida.”

About 113,000 customers in Texas were still without power on Wednesday, down from more than 500,000 on Tuesday, according to PowerOutage.US. Electricity outages after a storm not only affect homes and businesses, but also critical energy infrastructure, leading to additional shortages.

But the storm surge along the coasts of northeastern Texas and Louisiana was expected to diminish by Wednesday morning, the National Hurricane Center said.

Texas coastal oil refineries sailed through Nicholas. But a few in Louisiana are working to restart after Hurricane Ida, including Valero Energy Corp’s refineries in St. Charles and Meraux and PBF Energy’s refinery in Chalmette.

(Reporting by Laura Sanicola and Jessica Resnick-Ault in New York; Liz Hampton and Marianna Parraga in Houston; and Swati Verma and Arpan Varghese in Bengaluru Editing by Alistair Bell and Matthew Lewis)

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