Pascagoula Processing Plant Explosion Has Little Effect on Offshore Production
Three weeks ago when a fire shut down Enterprise Products Partners' (NYSE:EPD) (Houston, Texas) Pascagoula Natural Gas Processing plant (once belonging to BP plc (NYSE:BP) (London, England)), people wondered what effect the shutdown would have on offshore production. Would it shut in gas production? Would that shut-in extend to oil production? What about the pipeline that connects them? At the time of the explosion, it was unclear whether the Destin pipeline (a joint venture between BP and Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta)), which carries the gas onshore, would continue service.
While pipeline flows were temporarily halted, Destin has provided redirection services to ensure gas still makes it to market, though at a somewhat reduced flow rate. As it stands now, after the redirect has been put into effect, offshore platforms connected to Destin seem to be operating as normal, sending out gas, or are circulating their gas back into the well while continuing to send out oil. As such, on an operating level, the offshore platforms connected to Pascagoula via Destin have only experienced a brief hiccup while the Pascagoula plant remains offline.
Industrial Info is tracking the eight offshore platforms that feed into Destin pipeline and might have been affected. LLOG Exploration Company, L.L.C. (Covington, Louisiana) owns and operates the Delta House platform, which can produce 80,000 barrels per day (BBL/d) of crude oil, 40,000 BBL/d of condensate and 200 million standard cubic feet per day (MMSCFD) of natural gas. It is the northernmost of a chain of platforms on one leg of the Destin system, including two BP offshore platforms, the 130,000 BBL/d crude oil and 550 MMSCFD natural gas Na Kika platform and the 250,000 BBL/d and 250 MMSCFD Thunder Horse platform. It also includes Murphy Oil Corporation's (NYSE:MUR) (El Dorado, Arkansas) 60,000 BBL/d crude and 70 MMSCFD natural gas Thunder Hawk platform. Stone Energy Corporation (NYSE:SGY) (Lafayette, Louisiana) owns and operates the 60,000 BBL/d crude and 200MMSCFD Pompano platform on the same leg of the Destin system that Chevron Corporation (NYSE:CVX) (San Ramon, California) operates the 14,000 BBL/d crude and 14 MMSCFD natural gas VK 900 platform. The last two platforms have their own legs on the Destin system; Freeport McMoRan Incorporated (NYSE FCX) (Phoenix, Arizona with Shell plc (NYSE RDS.A) (The Hague, Netherlands) has the Marlin Platform, which can produce 60,000 BBL/d of crude oil and 235 MMSCFD of natural gas; and Freeport's own 75,000 BBL/d crude and 72MMSCFD natural gas Horn Mountain platform. All told, these facilities represent 729,000 BBL/d of crude oil production and 1,591 MMSCFD of natural gas production capacity.
Across the board, the message right now is "business as usual" with some minor operational differences. While most platforms are still flowing gas, some with nominations up by 9.5 MMSCFD over last week, many are taking advantage of the redirection provided by Destin to flow gas through neighboring pipeline systems to reach the shore. Other producers with the capability to do so are circulating their natural gas back into their wells to help oil production. However, save for a few hiccups in the form of derates and a couple days offline, production in this section of the Gulf continues in spite of the disaster in Pascagoula.
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