PIPELINE LEAK
Gulf Of Mexico Pipelines Could Restart Today
Gulf of Mexico offshore oil producers are working to restart output after damages to a pipeline halted operations at seven platforms, with Reuters reporting that the pipeline could be replaced by the end of today.
The Mars and Amberjack pipelines in the Gulf of Mexico that had shuttered earlier in the week could be restarted today, a Louisiana port official Chett Chiasson told Reuters on Friday.
The shutdown of the Mars and Amberjack pipelines triggered platform shutdowns on Thursday from Shell, Equinor, and Chevron across seven platforms following a leak in the Fourchon booster station. An estimated 600,000 bpd of production has been halted, according to Reuters sources.
Shell halted production at three offshore platforms in the Gulf of Mexico on Thursday following damage to a pipeline, shuttering Mars, Ursa and Olympus with a combined capacity of 410,000 barrels per day.
Early on Friday, Chevron followed suit, shuttering three of its Gulf platforms with combined capacities of around 134,000 boepd.
Chevron said on Friday that it was in the process of restarting those platforms.
On Thursday, announcing the shutdown, Shell had indicated that the repairs would likely be completed on Friday, though no estimate was given for the resumption of production at the time.
The shutdown potentially adds to the tight situation in the crude oil and refined products markets in the United States, which has been forced to tap into its Strategic Petroleum Reserve to bring prices down at the gas pumps.
The United States is witnessing crude oil inventories that are 5% below the five-year average, with production now 900,000 bpd below its peak prior to the COVID pandemic.
Crude oil prices were trading down 1.56% as of 1:25 EST on Friday.
By Charles Kennedy for Oilprice.com
Gulf Of Mexico Oil Outages Balloon Beyond Shell
At least two other oil majors shuttered their Gulf of Mexico platforms on Friday following a leak in the Fourchon booster station, shutting down the flow of crude through the Amberjack Pipelines.
On Thursday, Shell halted production at its Mars, Ursa, and Olympus platforms, which can produce 410,000 bpd. Shell did not provide an estimate for when the platforms would resume production.
On Friday, Shell was joined by Chevron, which shuttered Jack/St. Malo (57,000 boepd), Tahiti, and Bigfoot (75,000 bpd) platforms, which also feed into the Amberjack lines. Equinor joined Shell and Chevron on Friday, shuttering its Titan platform—a minor platform in the Gulf of Mexico that typically produces just 2,000 boepd.
The Fourchon booster station, which leaked two barrels of oil before being shut down, is expected to be repaired later today. It is not yet clear when platforms will resume production.
The shutdown, which now spans seven platforms in the Gulf of Mexico, comes at a time when the United States is battling high retail gasoline prices and tight crude oil and refined products markets. Already the United States has tapped into its Strategic Petroleum Reserve to the tune of 800,000 and 1 million barrels per day to alleviate the prices at the pump.
Crude oil inventories in the United States remain 5% below the five-year average. U.S. crude oil production currently sits at 12.2 million barrels per day, 900,000 bpd shy of its pre-Covid peak.
Crude oil prices were trading down on Friday, but still up week over week—a reality that could arrest the pattern of falling retail gasoline prices in the United States. The Biden administration has lobbied OPEC and Saudi Arabia specifically to raise oil production in the runup to midterm elections.
By Julianne Geiger for Oilprice.com
Shell Halts Oil Output At Three Gulf Of Mexico Platforms
Shell has halted production at three of its deepwater platforms in the Gulf of Mexico, Shell said in a statement to Reuters on Thursday.
Shell has halted production at its Mars, Ursa, and Olympus platforms, which combined can produce 410,000 barrels of Mars sour crude oil per day, after a leak shut in the Mars and Amberjack Pipelines that connect to the platforms. Shell has not provided a timetable for restart, although the company said it was evaluating "alternative flow paths" to bring the oil to shore through other pipeline routes.
"Shell is coordinating with local authorities and mobilizing personnel and equipment to assess the situation," Shell said in a statement.
The leak was detected at the Fourchon booster station, which increases the pressure and the flow of crude on its way to the Clovelly Dome Storage Terminal in LOOP. The Clovelly Dome terminal stores crude oil in underground salt caverns before heading to a refinery. The terminal is capable of holding 40 million barrels.
The United States is already releasing between 800,000 and 1 million barrels of crude oil per day from its Strategic Petroleum Reserves in an attempt to alleviate the tight market and bring down prices. Crude oil inventories in the United States are 5% below the five-year average, with crude oil production in the United States failing to return to pre-Covid levels.
Current crude oil production in the United States is at 12.2 million barrels per day, compared to the pre-Covid peak of 13.1 million bpd reached in March 2020.
By Julianne Geiger for Oilprice.com
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