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Oil output halted at 7 U.S. Gulf platforms on pipeline outage

By Reuters_News

18:28, 11 August 2022

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A file photo of a worker walking past oil pipes at a refinery in Wuhan, Hubei province March 23, 2012.
A file photo of a worker walking past oil pipes at a refinery in Wuhan, Hubei province March 23, 2012.

By Arathy Somasekhar and Laila Kearney

- U.S. offshore oil producers Shell SHEL.L, Chevron CVX.N and Equinor EQNR.OL on Thursday halted operations at facilities pumping hundreds of thousands of barrels of oil per day, citing an onshore pipeline leak that a port official said should take about a day to fix.

The shut-ins are not expected to last but the number of facilities affected by the leak offered another example of how a relatively minor failure can affect a swath of U.S. energy infrastructure.

The shut-ins could halt about 600,000 barrels per day of oil production, a person familiar with offshore operations said.

A flange connecting two pipelines onshore in Louisiana failed and caused about two barrels of oil to spill onto the ground, said Chett Chiasson, executive director of Greater Lafourche Port Commission. A fix is expected to take about a day, he added.

The spill halted operation of the Mars and Amberjack Pipelines that serve several oil production platforms off the Louisiana coast. It occurred at a booster station helps increase the pipeline pressure and advance crude oil flow to onshore storage facilities in Clovelly, Louisiana.

Shell's Mars, Ursa, and Olympus platforms were shut because of the leak. The three are designed to produce up to 410,000 barrels of oil per day combined, according to data on the company's website.

Chevron's Jack/St. Malo, Tahiti, and Big Foot oil facilities, which also connect to the Amberjack pipeline, have halted production. Equinor said it shut its Titan platform.

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Pipeline operator Shell said it was premature to estimate the impact of the shut-in and declined to provide a timeline on when operations would resume.

Murphy Oil, which also uses the Mars pipeline for some of its Gulf of Mexico operations, could not provide immediately comment on its operations, a spokesperson said.

Shell's three platforms deliver Mars sour crude, a grade prized by oil refiners in the United States and Asia. Shell said it was evaluating "alternative flow paths" to move the oil to shore via other pipelines.

Prices for Mars sour crude briefly strengthened to trade at a 50-cent discount to U.S. crude futures . Trading in the grade has been volatile, as it competes domestically with sour barrels released from the U.S. Strategic Petroleum reserve and in international markets with cut-priced Russian Urals barrels.

Fourchon Harbor Police Chief Michael Kinler said there was no sign of vandalism at the booster station and the amount of oil that leaked was not enough to halt traffic on the waterway or roads.

The leak happened late Wednesday or early Thursday between checks of the booster station infrastructure, Chiasson said. No waterways were affected by the spill and operations at the port were not affected, he added.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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