Discovery's processing offer doesn't boost gas flows from Gulf

Washington (Platts)--19Sep2005

The offer by Discovery Gas Transmission pipeline to process and carry
offshore natural gas shut-in by Hurricane Katrina's damage to several onshore
processing plants apparently has done little to increase the amount of gas
flowing from the Gulf of Mexico. 
     With the threat of Tropical Storm Rita, production recovery essentially
stopped with only an addition of 8,850 Mcf/d in added production over the
weekend, the US Minerals Management Service said, less than one-hundreth of a
percent of the Gulf's normal 10 Bcf/d of gas production.
     Using data from 54 producers, the MMS said in its daily report that 3.375
Bcf/d of gas production remained shut-in, 34% of the Gulf normal volume,
while cumulative production shut-in reached 116 Bcf/d, 3.2% of the Gulf's
annual production.
     The bulk of the shut-in production, 2.9 Bcf, remained in the easternmost
New Orleans district where Hurricane Katrina knocked out at least 4.2 Bcf
worth of natural gas processing capacity needed to strip liquids from offshore
gas before it is introduced to onshore pipeline systems.
     Producers have reported gas stranded in the Gulf waiting for the
processing plants, operated by Dynegy and Enterprise Product Partners, to
return to service after being flooded by Katrina, a process the companies now
say may take months.
     Discovery Gas Transmission, jointly owned by Williams and Duke Energy
Field Services, last week offered roughly 500,000 Mcf/d of capacity on the
Discovery line to producers trying to get gas to market. A company spokeswoman
could not say Monday whether any new volumes were flowing through Discovery,
which needed mechanical changes to its interconnections to make the plan work.
     Discovery said its 800,000 Mcf/d processing plant in Larose, Louisiana,
was only damaged slightly by Katrina. 
                                      ---Bill Holland, bill_holland@platts.com

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