HOUSTON/NEW YORK, July 30 - A crack in Shell's 173,000 barrel-per-day (bpd) Eugene Island oil pipeline off the shore of Louisiana should be easy to repair, although the damaged section may not carry crude for a few weeks, industry experts said Thursday.
"My guess is three weeks," said one person from another company who is familiar with the pipeline's operations but requested anonymity.
Operator Shell (RDSa.L) has yet to detail the pipeline problem beyond saying a crack was discovered in the 20-inch diameter (51-cm) line 33 miles (48 km) off the coast after it was shut down Saturday.
The line, carrying 100,000 bpd at the time of the leak, has spilled an estimated 1,500 barrels of crude into the Gulf of Mexico since Saturday. Seepage has been halted with temporary wrapping, the Coast Guard said Thursday.
It is unclear how much oil flow has been affected. Shell has not said. Chevron Corp (CVX.N) said Thursday flows continue uninterrupted from its Tahiti platform, which has been sending oil through the 154-mile (248-km) Eugene Island system.
Oil and pipeline experts, who spoke on condition of anonymity, said whatever is wrong with the Eugene Island pipeline should be readily repairable since it occurred at a water depth of only 60 feet (18 meters).
"This wouldn't be anything out of the ordinary," one said.
The speculative timeline for a restart of the Eugene Island pipeline could be days to weeks, the experts said. Shell has declined comment on when it can repair and restart the line.
Any permanent repair plan must first be approved by the U.S. Mineral Management Services, which has said it does not expect Shell to present a repair plan this week.
Underwater welding is unlikely because it's expensive and time-consuming. The industry has a pre-approved inventory of clampable sleeves that could be installed, experts said.
Even if the section of pipe that is cracked has to be cut out and replaced, the procedure could be quick, sources said.
Some analysts said a crack may raise bigger questions.
"A crack will give reason for pause to the metallurgy experts," said Carl Holland, an oil industry veteran who runs Connecticut-based Energy Trading Solutions. "That suggests to me some source of pipeline flex, movement, stress, versus internal corrosion."
Pipelines in the Gulf are regularly raked by hurricanes that sometimes move them around and cause breaks, but problems caused by storms usually show up fairly quickly. The last hurricane in the area was in September 2008.
The leak in the key Gulf Coast oil supply link was discovered 33 miles (48 km) offshore and 60 miles (97 km) southwest of the 154-mile (248 km) line's terminus at Houma.
The Coast Guard has led cleanup efforts and repeated Thursday the spilled oil is unlikely to reach shore, although the sheen had moved to within 12 miles (19 km) of the coast.
The offer price for Eugene Island crude EUI- and other grades with similar specifications, has surged to $2.50 over West Texas Intermediate CLc1 in recent days due to the outage. Eugene Island last traded publicly at 25 cents under WTI on July 21.
"My guess is three weeks," said one person from another company who is familiar with the pipeline's operations but requested anonymity.
Operator Shell (RDSa.L) has yet to detail the pipeline problem beyond saying a crack was discovered in the 20-inch diameter (51-cm) line 33 miles (48 km) off the coast after it was shut down Saturday.
The line, carrying 100,000 bpd at the time of the leak, has spilled an estimated 1,500 barrels of crude into the Gulf of Mexico since Saturday. Seepage has been halted with temporary wrapping, the Coast Guard said Thursday.
It is unclear how much oil flow has been affected. Shell has not said. Chevron Corp (CVX.N) said Thursday flows continue uninterrupted from its Tahiti platform, which has been sending oil through the 154-mile (248-km) Eugene Island system.
Oil and pipeline experts, who spoke on condition of anonymity, said whatever is wrong with the Eugene Island pipeline should be readily repairable since it occurred at a water depth of only 60 feet (18 meters).
"This wouldn't be anything out of the ordinary," one said.
The speculative timeline for a restart of the Eugene Island pipeline could be days to weeks, the experts said. Shell has declined comment on when it can repair and restart the line.
Any permanent repair plan must first be approved by the U.S. Mineral Management Services, which has said it does not expect Shell to present a repair plan this week.
Underwater welding is unlikely because it's expensive and time-consuming. The industry has a pre-approved inventory of clampable sleeves that could be installed, experts said.
Even if the section of pipe that is cracked has to be cut out and replaced, the procedure could be quick, sources said.
Some analysts said a crack may raise bigger questions.
"A crack will give reason for pause to the metallurgy experts," said Carl Holland, an oil industry veteran who runs Connecticut-based Energy Trading Solutions. "That suggests to me some source of pipeline flex, movement, stress, versus internal corrosion."
Pipelines in the Gulf are regularly raked by hurricanes that sometimes move them around and cause breaks, but problems caused by storms usually show up fairly quickly. The last hurricane in the area was in September 2008.
The leak in the key Gulf Coast oil supply link was discovered 33 miles (48 km) offshore and 60 miles (97 km) southwest of the 154-mile (248 km) line's terminus at Houma.
The Coast Guard has led cleanup efforts and repeated Thursday the spilled oil is unlikely to reach shore, although the sheen had moved to within 12 miles (19 km) of the coast.
The offer price for Eugene Island crude EUI- and other grades with similar specifications, has surged to $2.50 over West Texas Intermediate CLc1 in recent days due to the outage. Eugene Island last traded publicly at 25 cents under WTI on July 21.
