Oil industry awaits Isaac passage, no damage reported

HOUSTON (Reuters) - Hurricane Isaac battered the Gulf Coast on Wednesday causing flooding in southern Louisiana but so far no discernible damage to refineries or offshore oil and gas platforms.

Isaac, now a Category 1 hurricane, made landfall late Tuesday and was centered 45 miles southwest of New Orleans as of 11:00 a.m. EDT, provoking a dangerous storm surge and pelting coastal Louisiana with heavy rain that could prompt flooding through the day, the National Hurricane Center said.

Louisiana's coastal Plaquemines Parish reported flooding after storm waters flowed over a levee designed to protect the area.

The 247,000-barrel-per-day Phillips 66 Alliance refinery, which is located in the parish but on the opposite side of the Mississippi River from flooding, reported a power outage. Phillips said it wasn't able to confirm whether the storm had any other impact on the plant, which remained shut down.

Chevron said it would send crews out to assess its offshore platforms for any potential damage "when it's safe to do so."

Isaac was still packing winds up to 75 miles per hour. But energy industry analysts said the storm's passage left the Gulf's offshore oil and gas platforms without reported damages, which should allow production to restart soon. Energy firms had evacuated rigs in recent days.

The flooding in Plaquemines, the southernmost Parish in Louisiana located at the mouth of the Mississippi River, "is horrible for the people there, but I do not think this affects any oil and gas infrastructure," said Kenneth Medlock, an energy expert at Rice University's Baker Institute in Houston.

"The rigs offshore should be up in about a week," Medlock said. "The offshore facilities should be OK with regard to major damage ... I would not expect a prolonged production outage."

Williams Cos., which operates pipelines in the Gulf region, said that bad weather was still preventing any restaffing or restarting of oil and gas platforms that were evacuated offshore as Isaac approached.

The Gulf of Mexico accounts for 23 percent of U.S. oil production and 7 percent of natural gas output, most of which was shut down this week.

As of Tuesday, U.S. government figures showed 93 percent of offshore Gulf oil and two-thirds of natural gas output offline.

U.S. oil futures fell 1.2 percent to $95.20 a barrel by 11:49 a.m. EDT on Wednesday. U.S. gasoline futures were down 0.8 percent as many traders bet that Isaac would not damage refineries.

The Louisiana Offshore Oil Port (LOOP), a major import terminal, said it remained shut. Pipelines connect LOOP to refineries that account for around half of U.S. refining capacity.

NO REFINERY DAMAGE REPORTS

Initial reports on refinery operations in Louisiana did not indicate damage to plants, although energy analysts said that could remain a concern through Wednesday.

Emergency management officials in Garyville, Louisiana, said there were no reports of flooding or damage at Marathon Petroleum Corp's 490,000 bpd refinery.

Independent refiner Valero Energy said crews were riding out the storm inside two of its shuttered Louisiana plants -- located in Meraux and Norco -- and would assess for any damages once Isaac had passed.

Louisiana typically processes around 3 million bpd in its plants, many of which are located in low-lying areas near the coast. The broader Gulf Coast region is home to a refining hub with 7.8 million bpd capacity, or 45 percent of the U.S. total.

As of 8:00 a.m. EDT on Wednesday, 12 percent, or 936,500 bpd, of Gulf Coast refining capacity was closed down as a precautionary measure. That figure was little changed from Tuesday's outages, the U.S. Department of Energy said.

(Additional reporting by Selam Gebrekidan, Janet McGurty, Eileen Houlihan, Ed McAllister, David Sheppard and Robert Gibbons in New York; Writing by Joshua Schneyer; Editing by Lisa Von Ahn and Bob Burgdorfer)

Source: http://news.yahoo.com/oil-industry-awaits-isaac-passage-no-damage-reported-164703431.html

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