Energy companies are embarking on a days-long evaluation of the facilities hit by Hurricane Ida, as widespread power outages and flooding on the shore offer major obstacles to restarting oil and gas processing plants.
Hurricane Ida knocked out at least 94 percent of oil and gas production off the Gulf of Mexico and caused “catastrophic” damage to Louisiana’s network.
The power loss could take three weeks, utilities officials said, efforts to repair and restart energy facilities were delayed, which could also take at least two weeks to fully resume operations.
Power outages by a hurricane last year put oil processing plants in Lake Charles, Louisiana, on hold for up to five weeks, costing owners millions of dollars in lost production.
“You can not just turn the switch” and resume production at a refinery, says Robert Yawger, director of energy futures at Mizuho Securities, describing restarting as complicated and dangerous. “My observation is two to four weeks” before they can be completed, he said.
Hundreds of oil production platforms were evacuated and nearly 1.1 million homes and businesses in Louisiana and Mississippi were without power Monday afternoon. Refineries in Norco and Belle Chasse, Louisiana, remained overwhelmed a day after the storm passed, images showed.
Entergy Corp., the largest power provider in Louisiana, has warned that there is ‘catastrophic’ damage to transmission lines. One tower collapsed at the height of the storm and its power lines fell into the Mississippi River, the guest said.
Exxon Mobil Corp has halted operations at its 520,000 barrel per day (bpd) Baton Rouge oil processing and chemical complex due to a lack of power and raw materials, a spokesman said. Phillips 66 will conduct a post-storm evaluation at a refinery in a severely affected area of Louisiana, “if it is safe,” spokesman Bernardo Fallas said.
The most expensive working day
The disruptions could help push retail retail prices up 5 to 15 cents a liter, GasBuddy said. The extent of price increases will depend on how quickly electric power and a large fuel pipeline can resume their operations, said petroleum analyst Patrick De Haan.
Colonial Pipeline Co., the largest U.S. fuel pipeline network, hopes to begin pumping gasoline and diesel on closed lines from Houston to Greensboro, North Carolina, on Monday night, the report said. Its network supplies nearly half of the gasoline used along the U.S. east coast, and a prolonged shutdown in May led to fuel shortages.
The impact of Hurricane Ida on the oil industry is likely to make this Labor Day the most costly for U.S. executives since 2014.
The national average price for ordinary unleaded petrol should rise to $ 3.18 per liter over the weekend due to the lack of stock, says Patrick DeHaan, head of petroleum analysis for retailer GasBuddy.
“It’s too early to know the full impact of Ida’s damage to the oil and gas industry, but motorists across the region can expect price fluctuations to lead to Labor Day weekend,” said AAA car spokeswoman Jeanette McGee. said.
Oil companies have begun investigating foreign platforms for damage. Royal Dutch Shell planned a transfer of its properties on Monday and BP Plc, BHP, Chevron Corp and Exxon Mobil also said they were assessing offshore facilities.
“It will take a few days to get a clear picture of the potential impact,” said Ola Morten Aanestad, spokesman for Equinor ASA, which was evacuating its Titan platform and halting production in the US Gulf of Mexico.
About 1.72 million bpd of oil production and 2.01 million cubic feet per day of natural gas yields remain offline in the U.S. side of the Gulf of Mexico after evacuations at 288 platforms.
Nearly a dozen commercial shipping ports from New Orleans to Pascagoula, Mississippi, remained closed Monday. The closures include Louisiana Offshore Oil Port (LOOP), the largest privately owned export and import terminal in the US.
Ida landed near Port Fourchon, LOOP’s land base. Officials at the oil export port could not comment on Monday.