Energy Firms Tally Sally Damage

Reuters
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September 17, 2020

A washed up boat lies on the street after Hurricane Sally, in Orange Beach, Alabama, U.S., September 17, 2020. REUTERS/Kathleen Flynn

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By Erwin Seba HOUSTON, Sept 17 (Reuters) – Storm-tossed U.S. offshore energy producers and exporters began clearing debris on Thursday from Hurricane Sally and booting up idle Gulf of Mexico operations after hunkering down for five days.

The storm toppled trees, flooded streets and left 465,000 homes and businesses in Alabama, Georgia and Florida without power. Sally became a tropical depression on Thursday dropping up to 18 inches (46 cm) and causing flash flooding on its slog from Alabama toward North Carolina, the National Weather Service said.

Crews returned to at least 30 offshore oil and gas platforms. Equinor and Chevron Corp began restaffing platforms in the Gulf of Mexico, following Murphy Oil Corp’s restart this week.

Bristow Group, which transports oil workers from a Galliano, Louisiana, heliport, resumed crew-change flights to facilities in the west and central Gulf of Mexico.

“We are making flights offshore and experiencing a slight increase in outbound passengers,” said heliport manager Lani Moneyhon.

The Louisiana Offshore Oil Port, a deepwater oil port that handles supertankers, reopened its marine terminal after suspending operations over the weekend.

Sally had shut 508,000 barrels per day (bpd) of oil production and 805 million cubic feet of natural gas, more than a quarter of U.S. Gulf of Mexico output, and halted petrochemical exports all along the Gulf Coast.

About 1.4 million bpd of U.S. Gulf Coast refining capacity at six refineries were offline on Thursday, according to the U.S. Energy Department, including two plants under repair since Hurricane Laura and another halted by weak demand due to the COVID-19 pandemic.

Crude futures rose 2% on Thursday as the Organization of the Petroleum Exporting Countries promised to crack down on members’ exceeding output pledges. U.S. gasoline futures gained about 3% and was near the highest level this month.

Sally drenched an area from eastern Alabama to the Carolinas with torrential rains. At 11 am. CDT (1500 UTC), it was located about 115 miles (185 km) southwest of Athens, Georgia, moving northeast at 23 miles per hour (33 kph), according to the U.S. National Hurricane Center.

Sally is forecast to degenerate into a remnant low by Thursday night, according to the NHC.

Phillips 66, which shut its 255,600-bpd Alliance, Louisiana, oil refinery ahead of the storm, said it was advancing planned maintenance at the facility and would keep processing halted.

Royal Dutch Shell’s Mobile, Alabama, chemical plant and refinery reported no serious damage from an initial survey, the company said. Chevron said its Pascagoula, Mississippi, oil refinery operated normally through the storm.

Shell will keep the crude distillation unit, alkylation unit and reformer shut for at least a week at its 227,400-bpd Norco, Louisiana, refinery for short-term maintenance work, sources told Reuters. The units were shut due to the threat from Sally. (Reporting by Erwin Seba; Writing by Gary McWilliams; Editing by Marguerita Choy and Jonathan Oatis)

(c) Copyright Thomson Reuters 2020.

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