Tropical Storm Barry Rattles Hydrocarbon Production on Day Three

tropical storm in gulf of mexico
Blog July 12, 2019

On July 11, the National Hurricane Center officially upgraded the Gulf disturbance to Tropical Storm Barry as projected. In the one to three-day track, Barry is expected to continue westward towards the Louisiana coast at approximately 5 mph with maximum sustained winds of approximately 65 mph. Barry is anticipated to make landfall by 7 AM CT Saturday, but the chances of reaching a category 1 hurricane status are greatly reduced since yesterday’s reports. Over the next week, Barry is posed to bring heavy rainfall to the already saturated South Louisiana area, ranging from 3 to 18 inches depending on the area of impact.

As the storm approaches, many operators are evacuating platforms as a safety precaution. On Wednesday, Nautilus Pipeline evacuated all personnel from the Ship Shoal 207 platform and by noon, the Anaconda and Manta Ray receipts shut-in until further notice. Later in the day, Nautilus announced they would pause transporting quantities adequate for the Enterprise Neptune plant to continue processing offshore gas deliveries. The Sea Robin Pipeline almost completely shut in, while Garden Banks and Mississippi Canyon Pipeline evacuated. Anadarko evacuated all non-essential personnel on the eastern operated Gulf of Mexico (GOM) facilities and shut in central GOM facilities including: Constitution, Heidelberg, Holstein, and Marco Polo. BP, Royal Dutch, and Chevron followed suit and evacuated much of their offshore personnel. As of mid-day July 11, the BSEE estimated ~191 platforms shut in, four rigs evacuated, and 11 DP rigs moved off, which adds up to an estimated ~1.2 Bcf/d of gas shut in and a ~740 MMcf/day increase from the prior day.

As a result of Barry, GOM production dropped to ~500 MMcf/day on July 12 and overall ~1.7 Bcf/d since the evacuations started on Tuesday, July 9. However, a portion of the initial drop may be related to maintenance. Major pipeline drops include Nautilus (~400 MMcf/d), Sea Robin (~122 MMcf/d), Destin (~160 MMcf/d), Discovery (~190 MMcf/d), and Garden Banks (~170 MMcf/d).

Non-LNG demand in Louisiana sunk to a 30-day low of 2.05 Bcf/d, but this was not drastically out of normal range due to fluctuating power demand over the same period.

LNG Demand Related Impacts

Nominations to Sabine Pass LNG remain down in wake of Barry and deliveries to Cameron LNG deliveries are likely to be revised downward as well. Deliveries to Sabine Pass LNG dipped to 2.8 Bcf/d for gas days July 11 and 12. This dip represents an 800 MMcf/d decrease in deliveries to the facility, which averaged 3.6 Bcf/d during the seven days prior to the storm. Original nominations postings headed to Cameron LNG for gas day July 11 have since been revised down to ~260 MMcf/d. Evening cycle scheduled deliveries to Cameron LNG for today (July 12) are currently posted at 634 MMcf/d, but this number may fall in later cycles revisions. Our analysts will keep a close eye on intraday nominations revisions and our infrared monitoring of the liquefaction trains. Given that Barry is expected to make landfall early Saturday morning along the south-central Louisiana coast, this puts Cameron and Sabine Pass LNG facilities at greatest risk.

gas deliveries to sabine pass and cameron lng
Figure 1. Deliveries to Sabine Pass and Cameron LNG from July 1 through day three of Barry, July 12.

Oil Production Impacts

One day before it was officially announced, our U.S. High-Frequency Oil Production report captured the evacuation and shut-ins of GOM oil production platforms from Barry. On July 9, our High-Frequency Oil Production report showed BP Atlantis beginning to ramp down, with a production decrease of 106 Mb/d, which is down –41 percent from a previous average of 273 Mb/d. Total GOM shut-ins on July 9 resulted in 231 Mb/d of impacted production. Since then, we estimate GOM oil production decreased 601 Mb/d on Wednesday (July 10), 1,113 Mb/d on Thursday and 1,182 Mb/d today (July 12). This estimate is in line with BSEE’s production assessment of 602 Mb/d on July 10, 1,009 Mb/d on Thursday, and 1,110 Mb/d today (July 12). So far, TS Barry led to the evacuation of 38 percent oil production platforms in the Gulf, according to BSEE.

Gulf of Mexico Oil Production
Figure 2. Gulf of Mexico Oil Production, with Tropical Storm Barry affecting 1,182 Mb/d as of July 12, 2019.

As Barry gets closer to and eventually hits landfall, we will continue to keep our clients informed on production impacts and nominations revisions, oil production drops and impacts to LNG deliveries with a collection of our solutions.