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Shell repairs Gulf of Mexico pipeline

Oil Gas

Two pipelines serving oil platforms in the US Gulf of Mexico have been quickly brought back online, allowing the affected platforms to resume ramping up production again.

It is thought that the pipelines leaked two barrels worth of oil, which have since been removed, onto a gravelled area when a flange connecting the two pipelines failed. Shutting down the pipeline disrupted the operations of Equinor, Shell, and Chevron off the coast of Louisiana, resulting in about 600,000 barrels per day (bpd) of lost production.

Cindy Babski, a spokesperson for Shell, said that by Friday evening, a repair crew had corrected the problem at the Fourchon booster station and brought the pipelines back into normal service. She also said that production of Mars sour crude, a popular grade among American and Asian refiners, was in the process of being ramped up at three platforms operated by Shell, the maker of the Gadus grease range. Chevron also said it was restoring production at its Big Foot, Tahiti, and Jack/St. Malo platforms.

The price discount on Mars sour crude initially sank to $0.50 in response to the outage, but later relaxed to $1.40 as it became evident that normal pipeline operation would be quickly restored. The rapid repair of the pipelines was also welcome news for oil consumers, with crude oil futures dropping by 2% on the news that any longer-term disruption would be avoided, combined with concerns that an economic slowdown may affect the demand for crude oil.

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