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Storms Knock Out Substantial Gas Processing In Alberta

June 27, 2005
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Severe thunderstorms with high winds and heavy rain knocked out multiple natural gas processing plants near Empress, AB, last Tuesday evening, affecting several Bcf/d of processing capacity and significant production of ethane, propane and other gas liquids.

TransCanada PipeLines said six processing plants and related operations lost power and suffered some damage, including plants owned by ConocoPhillips, EnCana, Atco, Inter Pipeline and BP Canada. No injuries were reported. TransCanada spokesman Kurt Kadatz said despite the impact on gas processing there was no impact on natural gas pipeline throughput.

"We're seeing that gas just on bypass. Instead of going through the processing plants, it's just staying on the TransCanada system without being processed," said Kadatz. "So basically we are transporting gas with higher heating value but there has been no impact on safety, reliability or anything like that. That gas will just be sold at a higher heating value."

However, Nova Chemicals, the largest chemical producer in the province, said the outage could end up costing it C$50 million because of lost production during lengthy processing plant repairs. About 60% of its total ethane supply in Alberta was lost due to the storm damage. The company slowed down production at its Joffre, AB, manufacturing site as a result of reduced ethane availability and based on preliminary information it expects that it won't be back up to full supply of ethane for production of ethylene, polyethylene and co-products at its Joffre facility before the end of the third quarter.

Nova estimated the total earnings impact of the outage to be in the range of C$25 to C$50 million pre-tax (C$15 to C$30 million after-tax). Any impacts above that cost range may not be covered by insurance, it said.

BP Canada reported that the Empress I, Empress II and Empress V straddle plants, which straddle the TransCanada pipeline system about 62 miles northeast of Medicine Hat, will remain shut down and under a force majeure until damage can be assessed and repaired.

"The shut-in has resulted in an impact on the affected facilities' ability to receive product from, process, or deliver product to any other facility," BP Canada said. "While assessing the situation, BP Canada continues to be dedicated to its health, safety and environmental goal of no accidents, no harm to people and no damage to the environment."

Inter Pipeline Fund owns 100% of the Empress II plant, which processes 2.6 Bcf/d and produces 40,000 b/d of ethane and 20,000 b/d of propane. It also owns 50% of the Empress V facility, which processes 1.1 Bcf/d of natural gas and produces 17,000 b/d of ethane and 13,000 b/d of propane. An Inter Pipeline Fund spokeswoman said the Empress V plant is expected to be back up and running by early this week.

Empress 2, however, suffered more serious damage and will take two weeks to repair, she said. Both extraction facilities are operated by BP Canada. Inter Pipeline also owns the Bow River crude oil pipeline system in the Empress and Jenner areas, which also was impacted by the storm. The pipeline was restarted on Wednesday and was running near its 30,000-35,000 b/d capacity on Thursday.

An EnCana spokeswoman said the EnCana Empress plant, which processes 1.2 Bcf/d of gas, suffered some damage but it has not yet been determined when it will be repaired.

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ISSN © 2577-9877 | ISSN © 1532-1266
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