Cash market prices were recording strong rebounds from holiday weekend weakness, bolstered by the tropical storm developments and rising heat levels in several areas. A screen spike helped give a boost to late cash quotes. Gains ranged as low as about 20 cents in a couple of cases, but were much larger at most points. The West led the upward charge with upticks around 90 cents in San Juan Basin and at the Southern California border.
Meanwhile, another potential menace to offshore production came on the scene as Tropical Depression Four was upgraded to Tropical Storm Dennis in the southeastern Caribbean Sea. Although Cindy was of most immediate concern to Gulf of Mexico (GOM) producers, the Weather 2000 consulting firm thinks Dennis may be the greater of two evils, as it expects Dennis to enter the Gulf as the first hurricane of the 2005 Atlantic season.
Pipeline operators cautioned that platform evacuations and outages were a fluid situation with shut-in totals expected to keep rising as the day progressed. At least one producer expecting shut-ins said it also expected to be fully operating again Wednesday.
Minerals Management Service (MMS) said that with 12 companies reporting to it by 11:30 a.m. CDT, it had tallied 352.76 MMcf/d in total gas shut-ins and the evacuation of 23 platforms and six mobile drilling rigs. It also counted 49,830 bbl/d of shut-in oil. The gas volume was equivalent to 3.52% of the GOM's normal production of about 10 Bcf/d.
Although most of Cindy's impact was expected to be from offshore southeastern Louisiana eastward, MMS got reports of oil and gas shut-ins from as far west as its Lake Charles, LA office, and was told of one platform evacuation offshore southeast Texas by its Lake Jackson, TX office.
As of 1 p.m. CDT, Cindy's center was about 125 miles southwest of the mouth of the Mississippi River and was moving to the north at near 14 mph, according to the National Hurricane Center (NHC). In its latest three-day projection of the storm path, NHC looks for Cindy to come ashore south of New Orleans and cross the city and Lake Pontchartrain before turning northeastward through Mississippi and Alabama, reaching northeastern Tennessee by about 7 a.m. Friday.
Cindy prompted a tropical storm warning from Morgan City, LA to Destin, FL, with a tropical storm watch being extended east from Destin to Indian Pass, FL. Tropical storm force winds (34 mph or greater) extended outward up to 105 miles east of the center.
Noting that July 5 is "the earliest date on record" during a regular hurricane season for four named storms to have formed in the Atlantic Basin, NHC pegged the location of Dennis' center at 2 p.m. EDT as about 335 miles south-southwest of San Juan, Puerto Rico. It was speeding up a bit in a general motion toward the west-northwest at nearly 20 mph that was expected to continue for the next 24 hours. NHC projected that Dennis would be south of western Cuba by 8 a.m. early Friday.
Shut-ins have been "minimal so far" on Trunkline, a spokeswoman said. They were occurring primarily on blocks near Grand Isle, LA, with pipeline officials estimating 25-50 MMcf/d being out shortly before 10 a.m. CDT Tuesday. Customer deliveries have not been affected, she said. No reductions had been detected on Trunkline affiliate Florida Gas Transmission, the spokeswoman added.
A spokesman said about 70 MMcf/d was being impacted at 10 a.m. on Transco, mostly around the Mobile Bay area.
An El Paso Corp. spokesman said no shut-ins were occurring yet on either Tennessee or Southern Natural. He added that El Paso GOM Production was shutting in three platforms that afternoon, but didn't have the volume affected.
Texas Eastern was seeing "insignificant cuts" but still operating under normal conditions, a spokeswoman said.
Columbia Gulf is not experiencing any shut-ins yet, a spokesman said shortly before 11 a.m. He added that Cindy may not affect Columbia Gulf much since it has no facilities in the storm's path due south of New Orleans, and most of its offshore system is off central and western Louisiana.
A few producers also indicated that the storm's impact on Gulf of Mexico (GOM) production may be brief and minimal. Chevron expects no shut-ins associated with the storm, a spokesman said, adding that only a few nonessential personnel are being relocated from the company's Central and Eastern GOM operations.
A spokeswoman said Anadarko Corp. is "continuing as normal." There are no plans to evacuate, nor are any shut-ins anticipated, she said.
Even companies planning shut-ins are expecting short-lived impact. Unocal expects to bring in a "handful of people" -- under 10 nonessential personnel -- ahead of the storm this afternoon, a spokeswoman said. Although it hadn't done so yet, Unocal anticipated shutting in about 200 bbl/d of oil and 500 Mcf/d of gas later, but it also expects to be back at full production by Wednesday morning, she said.
Similarly, Marathon expected to resume full production sometime Wednesday after reporting it had evacuated 45 nonessential workers from three platforms and shut in 2,400 bbl/d and 9.5 MMcf/d.
Shell Oil reported removing 56 nonessential workers from its Gulf of Mexico facilities, but said no production has been impacted "at this time." The company is monitoring the storm, as are several other producers, including Kerr-McGee.
One source said a lot of producers have offices on vacation this week, so it may be difficult to contact some of them.
New York City-based Weather 2000 said Dennis took advantage of a one-week window of favorable atmospheric conditions to get itself "organized in quite a hurry. Dennis is by far the biggest concern as it will likely become the first hurricane of the 2005 season. While not to be alarmist, Dennis will likely take on a path similar to Charley (eastern range) or Ivan (western range)."
The consulting firm believes that Dennis' future will greatly depend on its interaction with Cuba, which it called the proverbial island "Gate-Keeper" of the GOM. "If Dennis parallels Cuba, than the mountainous terrain will take a devastating toll on the storm's structure and would could wind up with a feeble tropical storm south of Florida. If Dennis takes a more linear westward path and only slices over western Cuba (or the center misses it altogether like Ivan), then Dennis could become a real menace. We are leaning towards the latter scenario at this juncture..."
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