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Gulf Of Mexico Pipelines Could Restart Today

Gulf of Mexico offshore oil producers are working to restart output after damages to a pipeline halted operations at seven platforms, with Reuters reporting that the pipeline could be replaced by the end of today.

The Mars and Amberjack pipelines in the Gulf of Mexico that had shuttered earlier in the week could be restarted today, a Louisiana port official Chett Chiasson told Reuters on Friday.

The shutdown of the Mars and Amberjack pipelines triggered platform shutdowns on Thursday from Shell, Equinor, and Chevron across seven platforms following a leak in the Fourchon booster station.  An estimated 600,000 bpd of production has been halted, according to Reuters sources.

Shell halted production at three offshore platforms in the Gulf of Mexico on Thursday following damage to a pipeline, shuttering Mars, Ursa and Olympus with a combined capacity of 410,000 barrels per day.

Early on Friday, Chevron followed suit, shuttering three of its Gulf platforms with combined capacities of around 134,000 boepd.

Chevron said on Friday that it was in the process of restarting those platforms.

On Thursday, announcing the shutdown, Shell had indicated that the repairs would likely be completed on Friday, though no estimate was given for the resumption of production at the time. 

The shutdown potentially adds to the tight situation in the crude oil and refined products markets in the United States, which has been forced to tap into its Strategic Petroleum Reserve to bring prices down at the gas pumps.

The United States is witnessing crude oil inventories that are 5% below the five-year average, with production now 900,000 bpd below its peak prior to the COVID pandemic.

Crude oil prices were trading down 1.56% as of 1:25 EST on Friday.

By Charles Kennedy for Oilprice.com

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