Majority of US Gulf oil, natgas remains shut in after Hurricane Ida

Author: Janet Miranda

2021/08/31

HOUSTON (ICIS)--A majority of US Gulf oil and natural gas remains shut in after Hurricane Ida made landfall on Sunday.

Nearly 94% of current oil production and 94% of gas production in the US Gulf remains shut in, according to the latest update by the US Bureau of Safety and Environmental Enforcement (BSEE).

The amount of oil and gas shut in has eased slightly from Monday.

Total %
Platforms evacuated 278 49.64
Rigs evacuated 9 81.8
Oil shut in (bbl/day) 1,705,095 93.69
Gas shut in (bcf/day) 2.107 94.47

Source: BSEE

US major oil companies have begun to assess the damage to offshore facilities in the Gulf of Mexico.

Shell conducted a flyover for initial assessments of assets in the impacted area. Mars, Olympus and Ursa are all intact and on location.

Its floating production storage and offloading vessel, the Turritella, has resumed production. Its Perdido asset in the southwestern Gulf of Mexico remained online through Hurricane Ida.

All other assets remain shut in and fully evacuated at this time, the company said.

Chevron’s production in the Gulf remains shut in. Fourchon terminal, Empire terminal and their related pipeline systems are also shut in.

The company said it continues to conduct post-storm assessments at both its onshore and offshore facilities.

BP production remains shut in as well. It said production at its Gulf platforms will remain shut in until the company receives confirmation that its infrastructure is safe to operate and offshore pipeline companies have confirmed operability.

POWER OUTAGES
Power outages continue to exist for about 840,000 customers across the state of Louisiana and parts of Mississippi after Hurricane Ida made landfall on Sunday. The main power distributor in the state said the hardest-hit areas could experience outages "for weeks".

Entergy - the main power distributor for the state of Louisiana - is still assessing the damage, which included damage to major transmission lines that deliver power to numerous Louisiana parishes, which remain out of service.

The number of outages has dropped slightly from Monday.

"The worst damage seen so far is in the south, southeast, Baton Rouge and New Orleans metro regions, with significant flooding reported in the southeast region," the company said in an update around mid-day on Tuesday.

"Because of the extent of damage and rebuilding required, we expect recovery to be difficult and challenging, and customers in the hardest-hit areas should expect extended power outages lasting for weeks," the company said.

Power outages can shut down operations at chemical plants and delay their restart.

Many companies shut down plants in anticipation of the storm. These plants make many plastics and chemicals that are in short supply. If they stay idled long enough, the shutdowns will further tighten markets.

PLANT SHUTDOWNS
The following table shows chemical plants and refineries in the region that have shut down.

Company Site Products Status
DAK Americas Bay St Louis, Mississippi PET FM
Cos-Mar Carville, Louisiana Styrene, ethylbenzene Shutdown
AmSty St James, Louisiana Styrene Shutdown
Valero Meraux, Louisiana Gasoline, refined products, propylene, propylene upgrade Shutdown
Valero St Charles, Louisiana Gasoline, refined products, propylene, propylene upgrade Shutdown
Shintech Addis, Louisiana Ethylene, chlorine, caustic soda, EDC, VCM, PVC Shutdown
Shintech Plaquemine, Louisiana Ethylene, chlorine, caustic soda, EDC, VCM, PVC Shutdown
Rubicon Geismar, Louisiana MDI, polyether polyols, aniline, nitrobenzene Shutdown
Pinnacle Polymers Garyville, Louisiana PP FM
Phillips 66 Belle Chasse, Louisiana Refined products, aromatics, propylene Shutdown
Olin Plaquemine, Louisiana Caustic soda, chlorine Shutdown
Olin St Gabriel, Louisiana Caustic soda, chlorine Shutdown
NOVA Geismar, Louisiana Ethylene, propylene Shutdown
Marathon Petroleum Garyville, Louisiana Gasoline, refined products Shutdown
ExxonMobil Baton Rouge, Louisiana Gasoline, refinery grade propylene (RGP), benzene, toluene Shutdown
Dow Taft, Louisiana Oxo-alcohols (Isobutanol, n-Butanol) Shutdown
Cornerstone Waggaman, Louisiana ACN, melamine FM
Westlake Geismar, Louisiana Caustic soda, EDC, PVC, VCM Shutdown
Westlake Plaquemine, Louisiana Caustic soda, EDC, PVC, VCM Shutdown
Formosa Plastics Baton Rouge, Louisiana PVC, VCM Shutdown
ExxonMobil Baton Rouge, Louisiana Olefins, aromatics, IPA, polyolefins, base oils Shutdown
Dow Taft, Louisiana Olefins, acetic acid, acrylic acid, acrylic acid esters, ethanolamines, EO, glycol ethers, LLDPE, oxo-alcohols Shutdown
Dow Plaquemine, Louisiana Olefins, aromatics, EO, glycol ethers, LDPE, LLDPE, PG, PO Shutdown
BASF Geismar, Louisiana BDO, EO, MDI, TDI, polyols Shutdown
Shell Norco, Louisiana Olefins Shutdown
Shell Geismar, Louisiana LAO, EG, EO, linear alcohols, glycol ethers Shutdown
Phillips 66 Belle Chasse, Louisiana Refined products, aromatics, propylene Shutdown
Cornerstone Waggaman, Louisiana ACN, melamine Shutdown

The products made at many of these plants are already in short supply and the shutdowns could impact availability.

In the US fertilizer markets, CF Industries confirmed late Monday that the initial assessment of its Louisiana Donaldsonville Complex did not present significant damage from Hurricane Ida and production will resume as soon as possible.

The company shut down all production on 28 August, as the category 4 storm neared landfall. The complex includes six ammonia plants, five urea plants, four nitric acid plants and three urea ammonium nitrate (UAN) plants.

RAIL UPDATE
At least two of the main railroad lines running through Louisiana could be down for two to three weeks, two market sources said on Tuesday.

Railroad companies have not disclosed how long their main railroad lines could remain out of service.

Two companies confirmed that their lines are out.

BNSF said its main line between Lafayette, Louisiana, and New Orleans remains out of service.

Kansas City Southern has suspended rail operations on a portion of its line because of excessive rain and wind caused by Hurricane Ida, the company said on Monday.

Kansas City Southern said mainline operations and interchanges from New Orleans to Baton Rouge in Louisiana have been suspended, as well as Gulfport/Hattiesburg, Mississippi.

Once the line has reopened, customers should expect delays until Kansas City Southern works through backlogs and until it can resume normal speeds in the areas impacted by Hurricane Ida.

The New Orleans Flood Protection Authority has closed the area's floodgates, which will disrupt all eastward and westward rail routes going through New Orleans, including interchange routes on other carriers.

On Monday, Union Pacific said engineering crews have started to inspect railroad tracks to assess any storm damage. Because the floodgates are closed, there is no interchange to eastern carriers, so Union Pacific is continuing to review options for rerouting traffic.

Union Pacific had suspended operations at its intermodal terminal in Avondale, Louisiana.

Norfolk Southern said the intermodal terminal in New Orleans will remain closed through Tuesday. Customers with shipments destined to hurricane areas or through them should expect delays of 48-72 hours.

In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest.

MISSISSIPPI RIVER
A Coast Guard spokesperson said the department is still in the early stages of assessing the navigability of the waterway, but that no blockages had been reported as of Tuesday morning.

PORT RESTRICTIONS, SHUTDOWNS
Ports threatened by Hurricane Ida have either restricted operations or shut them down.

Port Status Condition
New Orleans, Louisiana Closed Zulu
Plaquemines, Louisiana Closed Zulu
South Louisiana, Louisiana Closed Zulu
St Bernard, Louisiana Closed Zulu
Baton Rouge, Louisiana Closed Zulu
Pascagoula, Mississippi Closed Zulu
Biloxi, Mississippi Closed Zulu
Gulfport, Mississippi Closed Zulu
Mobile, Alabama Open with Restrictions Yankee
Pensacola, Florida Open with Restrictions X-Ray
Panama City, Florida Open with Restrictions X-Ray

The Louisiana Offshore Oil Port (LOOP) has paused deliveries of crude until Hurricane Ida subsides, it said on Sunday.

The Louisiana Offshore Oil Port is the nation's only deepwater oil port for supertankers. Some 50% of the nation's refining capacity can be supplied by LOOP, which moves 12% of the nation's annual crude oil imports.

POTENTIAL FOR DAMAGE
Ida's size, strength and path could cause billions of dollars worth of damage.

The property data firm CoreLogic estimated on Friday that Ida's storm surge is threatening 941,392 homes. If all of these homes were destroyed and replaced, CoreLogic estimates that the cost would be $220.37bn.

The reconstruction cost value represents a worst-case scenario, CoreLogic said. For reference, the firm estimated in 2020 that Hurricane Laura may have caused $8bn-12bn in insurable losses.

Home repairs, remodelling and construction make up an important end market for several chemicals and polymers.

The white pigment titanium dioxide (TiO2) is used in paints.

Solvents used in paints and coatings include butyl acetate (butac), butyl acrylate (butyl-A), ethyl acetate (etac), glycol ethers, methyl ethyl ketone (MEK) and isopropanol (IPA).

Blends of aliphatic and aromatic solvents are also used to make paints and coatings.

For polymers, expandable polystyrene (EPS) and polyurethane (PU) foam are used in insulation.

Polyurethanes are made of methylene diphenyl diisocyanate (MDI), toluene diisocyanate (TDI) and polyols.

High-density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes.

Unsaturated polyester resins (UPR) are used to make coatings and composites.

Vinyl acetate monomer (VAM) is used to make paints and adhesives.

Additional reporting by Al Greenwood, Annalise Porter, Adam Yanelli