FACTBOX: Power outages spread, refineries closed and almost 95% of US Gulf oil, gas offline as Hurricane Ida makes landfall

Close to 95% of total US oil and gas production came offline in the Gulf of Mexico as the Category 4 Hurricane Ida made a Louisiana landfall Aug. 29, and many of the state's refining and petrochemical plants were shuttered ahead of the storm.

Ida made landfall south of New Orleans just before noon CT Aug. 29 as one of the most powerful storms to ever hit the US Gulf Coast with maximum sustained winds of 150 mph.

The US Bureau of Safety and Environmental Enforcement said Aug. 29 that 95.65% of the US Gulf's crude oil, or 1.741 million b/d, was shut in, as well as 93.75% of the region's approximately 2.2 Bcf/d of natural gas production, or about 2.091 Bcf/d.

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Close to 4.4 million b/d of operating refinery capacity is in the path of Ida, primarily in Louisiana, and at least half of that at-risk capacity came offline ahead of Ida as Phillips 66, Shell, ExxonMobil, Valero and others closed refining units. Ida's wind speed will play a major role in how hard it strikes at the heart of USGC refining centers, according to S&P Global Platts Analytics.

"Many plants have been hardened against hurricanes, but disruptions in operations are still very likely due to flooding, power outages and personnel dislocations," Platts Analytics said.

Colonial Pipeline -- the primary fuel artery from Houston to the South and East Coast -- said Aug. 29 it temporarily shut down its Lines 1 and 2 systems from Houston to Greensboro, North Carolina. Colonial said the rest of the network from North Carolina to New Jersey is operating normally. Colonial said the closure is precautionary and the lines should resume full service after Ida passes and the system is evaluated.

Louisiana and other Gulf Coast utility crews also added extra personnel in preparation for widespread power outages across the region.

Just after 1 pm CT Aug. 29, Louisiana had about 240,000 electricity customers without power, led by Entergy with 150,000, almost all of them in Louisiana, according to a Nola.com report. A hurricane typically causes power demand destruction, as it severs transmission and distribution lines to loads. With weaker demand, lower prices would be expected, but much of the nation's natural gas flows through Louisiana, and Ida could disrupt that infrastructure and increase pressure on gas prices.

PRICES

Oil

**Oil markets likely to open higher on the evening of Aug. 29 ahead of weekly trading, analysts said.

**NYMEX September RBOB settled up 1.88 cents at $2.2742/gal Aug. 27.

**NYMEX September ULSD climbed 2.60 cents to settle at $2.1092/gal.

**ULSD assessed at a 4.55 cent/gal discount to front-month NYMEX ULSD, the highest level since March 26.

**NYMEX October WTI settled $1.32 higher at $68.74/b.

Natural gas

**Henry Hub prices gained 14 cents to settle at $4.34/MMBtu for the weekend, the strongest spot price since the severe winter storm in mid-February.

**Henry Hub forwards saw strong support during Aug. 27 trading, with the prompt contract gaining 15 cents to $4.33/MMBtu.

**Winter strip pricing increased by 10-13 cents as the January 2022 contract broke above $4.50/MMBtu.

Power

**Day-ahead on-peak power for delivery Aug. 30 was bid at $50/MWh and offered at $85/MWh on the Intercontinental Exchange, up from the $41.50/MWh that power for delivery Aug. 27 settled at Aug. 26.

TRADE FLOWS

Oil

**Louisiana Offshore Oil Port (LOOP) said it was executing its storm plan, suspending deliveries.

**Ports of New Orleans, Houma and Mobile -- covering Alabama and Mississippi coasts -- were closed to inbound and outbound traffic as of Aug. 28.

**Some other Gulf Coast ports were restricted as well, according to the US Coast Guard.

**Gasoline inventories in PADD III heading into the weekend were adequate at 2.5 million barrels higher relative to the five-year average, Platts Analytics said, but could be rapidly depleted in a week to the lowest levels since February.

**Duration of partial Colonial Pipeline closure will determine much of fuel flow.

Natural gas

**As of late Aug. 27, there were two tankers at Sabine Pass, one at Cameron LNG and one at Freeport LNG, according to Platts cFlow.

**Sabine Pilots advised late Aug. 27 that any facilities in the area that want to empty their berths should do so sooner rather than later as Ida approaches Louisiana.

**While Louisiana LNG facilities remain open, exports likely will be restricted until Ida passes. Pilots serving the channels were meeting to assess the situation, according to shipper notices.

INFRASTRUCTURE

Oil

**Crews were evacuated from 288 production platforms, or 51% of the 560 manned US Gulf platforms, BSEE said.

**BP said Aug. 28 it had shut in production and evacuated crews from its four US Gulf platforms.

**Shell shut in production and evacuated Ursa, Mars, Olympus and Appomattox assets, and shut in Auger and Enchilada/Salsa facilities.

**Shell was planning to restart its Stones field -- just west of Ida's projected path -- after shutting it down earlier in the week when the storm was tracking farther west.

**Chevron shut in production from its operated Gulf of Mexico platforms, and closed its Fourchon and Empire terminals and pipelines in Louisiana.

**Murphy Oil, BHP, ExxonMobil and Equinor shut in and evacuated all of their offshore platforms.

Refining

**Shell shut down its 230,600 b/d Norco Refinery in Louisiana, as well as its Geismar petrochemical plant.

**Phillips 66 closed its 255,600 Alliance Refinery in Belle Chasse, Louisiana.

**Louisiana's 17 refineries have aggregate capacity of 3.4 million b/d, representing about 20% of the nation's total capacity, according to US EIA data.

**Mississippi has a total refinery capacity of 394,000 b/d, according to EIA.

**These refineries accounted for 1.4 million-1.6 million b/d of gasoline output, 1.1 million-1.3 million b/d of distillate production, and 300,000-400,000 b/d of kerojet supply, Platts Analytics said.

**ExxonMobil said late Aug. 28 it was shutting some refinery units and equipment at its 520,000 b/d Baton Rouge, Louisiana, facility ahead of Hurricane Ida.

**Valero Energy shut down its 215,000 b/d St. Charles refinery in Norco and its 125,000 b/d refinery in Meraux, Louisiana.

**Valero's renewable diesel Diamond Green Diesel 290 million gal/yr facility in Norco was closed ahead of the storm.

Pipelines

**Chevron closed its Fourchon and Empire pipelines and terminals in Louisiana.

**Colonial Pipeline said Lines 1 and 2 closures from Houston to North Carolina are precautionary and should resume full service after Ida passes and the system is evaluated.

Natural gas

**Cheniere Energy, Cameron LNG and Freeport LNG -- all west of Ida's path -- remained confident they could stay open.

**For petrochemicals facilities, more shutdowns are expected for both steam crackers and their downstream units, Platts Analytics said.

**Potential impacts include roughly 6.5 million t/year of ethylene capacity, 3.8 million tons of polyethylene, and 1.1 million tons for polypropylene, according to Platts Analytics.

**Other facilities include 3.6 million tons of PVC and 300,000 tons of MEG.

Power

**As of about 4:30 pm CT Aug. 29, MISO had a peakload of about 100.2 GW, compared with the forecast load of about 102.3 GW.

**The Louisiana Hub real-time locational marginal price was $36.77/MWh around 5:30 pm CT, compared with an average real-time LMP of about $34.60/MWh for the previous four Sundays in August.

**Cleco, a large utility serving Louisiana, said it had secured the help of an additional 2,000 workers to assist in restoring service that the storm may disrupt.

**Cleco issued a news release at 2 pm CT Aug. 29 stating that it had ceased restoration work in South Louisiana "due to heavy rain and high winds."

**Entergy on Aug. 28 said it should be able to deploy roughly 16,000 workers, including from outside the region, to help restore power knocked out by the storm.

**Customers in the direct path of Ida could lose power for more than three weeks, Entergy said.