Shell to Bring Na Kika Back Online November 1

Shell will bring its Na Kika pipeline in the U.S. Gulf of Mexico back into service November 1, the company's spokesman said.

The pipeline, crucial to the resumption of production of highly valued Heavy Louisiana Sweet crude oil, was knocked out of service by Hurricane Ivan. Production of the sweet crude has been disrupted for almost a month, helping drive oil futures in New York to nearly $55 a barrel.

The Na Kika pipeline's capacity is 140,000 barrels of oil a day. Before the hurricane, throughput was 122,000 barrels of oil a day, according to Fred Palmer, Shell's spokesman in New Orleans.

Some 471,000 barrels a day of oil production remains off line in the Gulf of Mexico, the U.S. Minerals Management Service said Thursday.

Damage to pipelines leading to the Na Kika platform, operated by BP PLC (BP), is keeping as much as 110,000 barrels a day of HLS shut in, even though the platform is otherwise ready to be restored to service.

Shell's Na Kika pipeline was damaged at two locations by the hurricane: near Main Pass 151, where it lies 210 feet under water, and near Main Pass 69, where the water is 40 feet deep.

Progress on Shell's Na Kika at Main Pass 69 is also the key to BP's ability to repair its MPOG line, which lies underneath the Shell line and was damaged by the hurricane at the same location.

BP said Thursday it expects to bring its Gulf of Mexico production back to normal by the end of October.

Two other Shell-operated pipelines, Odyssey and Delta, are still closed and are seen back up no later than about mid-November, a source familiar with Shell's pipeline system said Wednesday.