Price of natural gas is expected to rise Storm destroyed 13 gulf platforms, damaged 100 more

September 02, 1992|By New York Times

DALLAS -- The estimate of the toll from Hurricane Andrew's assault on oil-and-gas operations in the Gulf of Mexico climbed sharply Tuesday, bolstering the view that natural gas prices will rise in the coming weeks.

The Minerals Management Service in Washington, which regulates energy production in federal waters, said yesterday that 13 platforms had been toppled by the hurricane as it raced into Louisiana and that 100 more within 20 miles of its path were severely damaged.

The initial estimate by the agency Friday had been that four platforms had toppled and 38 others had been damaged. Scott Sewell, the agency's national director, said the damage totals would rise by next week as companies finished detailed reviews.

He estimated the cost of damage to date at $100 million, excluding disruption of production and pipeline shipments.

"This was truly a 100-year storm," Sewell said, referring to the winds of 160 miles an hour and wave surges of more than 60 feet.

The amount of natural gas output lost because of the storm was unclear. Analysts have put the figure at 1 billion to 3 billion cubic feet a day, or 8 percent to 15 percent of the 13 billion cubic feet produced daily from the Gulf of Mexico.

Mr. Sewell said the loss was "perhaps" 1 billion cubic feet a day. He also said that about 15 percent of the nation's oil-refining capacity, which includes gasoline production, had been temporarily lost because of hurricane damage.

Paul Leibman, an analyst at Petrie, Parkman & Co., a Denver brokerage firm, said the federal report was a sign that natural gas deliveries from the gulf region would be lower than anticipated for several weeks.

"This sounds like it will have more of an enduring impact than at first perception," he said.

John H. Lichtblau, president of the Petroleum Industry Research Foundation in New York, said: "Things will get back to normal for oil in a very short time. But some of those gas production platforms won't be repaired until October or November. The damage is bigger than everybody thought."

The report by the Minerals Management Service, a unit of the Interior Department, was released after the close of trading on the Mercantile Exchange in New York, where prices of futures contracts for natural gas had drifted lower during the day.

Mr. Sewell said his agency would issue reports every other day this week.

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