Hurricane Katrina's Impact on the Oil and Gas Industry
Category: Hurricane Katrina... Oil & Gas...
Posted Monday, August 29, 2005 at 05:27 PM [GMT-6]

Here's the latest on how Katrina has impacted the US Gulf of Mexico's oil and gas producers and refiners (all statistics via John S. Herold, Inc.):

• Eight refineries with about 2 million barrels of day of capacity were shut in prior to the storm. This represents 12% of the nation's total refining capacity.


• The refinery shutdowns took about 1 million barrels per day (42 million gallons) of gasoline out of the market.


• It's estimated that just under 1.4 million barrels per day of crude oil production was shut-in in the Gulf of Mexico, out of a total of 1.5 million BPD.


• It's estimated that 8.3 billion cubic feet per day of natural gas production was shut-in in the Gulf of Mexico, out of a total of 10 billion CFPD.


• The closing of the Louisiana Offshore Oil Port (LOOP) takes 11% of the country's daily import of foreign crude oil off the market.

Herold goes on to note that while there are options for replacing any shortfalls in crude oil (increased imports; release from the SPR), the replacement of lost natural gas production is much more worrisome. Also, it's too early to assess the possible damage to shallow gas pipelines. If there's significant damage to those lines, resumption of natural gas production could be delayed even if the production platforms came back online quickly.

Herold does report that the Sabine Pipeline which serves the crucial Henry Hub (which is the centralized point for natural gas futures trading in the U. S.) and was shut down in advance of the storm, apparently had no significant damage.

Technorati tags: Katrina | Oil & Gas Industry | Energy Prices