Natural gas markets were focused on the Rockies last week as El Paso Corp. said an "equipment fire" Sept. 16 in the Cheyenne Plains Compressor Station had completely cut off deliveries to Cheyenne Plains Gas Pipeline from Wyoming Interstate Co. (WIC) and Colorado Interstate Gas (CIG).

"Cheyenne Plains has experienced a facility outage at the Cheyenne Plains Compressor Station," the company said.

According to Golden, CO-based Bentek Energy, nominated flows on Sept. 16 from CIG and WIC into Cheyenne Plains were 83,610 Mcf/d and 82,367 Mcf/d, respectively.

Deliveries went from 780,000 MMbtu/d to zero after the fire on Sunday. Subsequently, some deliveries were resumed. According to Bentek, which tracks pipeline gas flows, nominations on Cheyenne for Thursday were 405,505 MMBtu, and 415,000 MMBtu on Friday.

With restrictions on Rockies gas flowing out of the area, cash market points in the region headed lower. Beset by yet another transportation setback -- this one unplanned -- several Rockies points saw lows of 1, 2 or 3 cents on Sept. 17 while Cheyenne Hub averaged less than a nickel and CIG was only a couple of pennies higher. Some traders also said the outage helped natural gas futures prices to soar. October natural gas futures jumped 37.4 cents to $6.653 on Sept. 17.

"At the time of the incident at approximately 12:30 p.m. Mountain time on Sunday, we had about 780 MMcf/d flowing via the Cheyenne Hub into the Cheyenne Plains pipeline," said Richard Wheatley, a spokesman with El Paso. "Of course, those flows [were zero Monday, Sept. 17]. If it were not for the damage to the equipment in and around the compressor station, WIC and CIG would not be affected, but because they flow into Cheyenne Plains, they are not flowing at this time. We are working to come up with alternatives and also optimization plans for the system."

Wheatley noted that damage assessment and restoration teams are in place, but a timeline for the repairs is currently unknown. "This is going to be a situation that will be determined once we know the extent of the damages. We want to get the alternatives prioritized and also the optimization of the gas flows so that we can at least come up with backstop efforts to hopefully get some of that gas flow back on as soon as possible."

In the wake of the Sept. 16 fire, Cheyenne Plains said it has found itself between a rock and a hard place as it attempts to "satisfy competing and currently incompatible goals."

Cheyenne Plains said it seeks to honor firm transport commitments to the maximum extent possible under the circumstances, and it also wants to accommodate its shippers' desire to maximize gas flow out of the Rocky Mountains for the public benefit.

An "equipment fire" in the Cheyenne Plains Compressor Station had completely cut off deliveries to Cheyenne Plains from Wyoming Interstate Co. (WIC) and Colorado Interstate Gas (CIG). The fire resulted from the release and subsequent ignition of gas when the flange connections associated with a relief valve on the suction side of the station's compression failed. When the fire was detected, all compression in the Cheyenne yard was shut down, including that serving CIG and WIC. Subsequently, the compression facilities serving CIG and WIC were able to return to service.

Last Wednesday, El Paso reported that the fire resulted from the release and subsequent ignition of gas when the flange connections associated with a relief valve on the suction side of the Cheyenne Plains compression failed. When the fire was detected, all compression in the Cheyenne yard was shut down, including that serving CIG and WIC. Subsequently, the compression facilities serving CIG and WIC were able to return to service. "Although damage assessments of the Cheyenne Plains facilities are continuing, it is clear that a significant amount of instrumentation and electrical wiring was damaged in the fire and will need to be replaced. This includes most of the cable trays and associated electrical wiring. Some nearby yard piping and valves appear to need replacement as well," the company said.

After updating its progress throughout the last week, El Paso said Friday it was continuing free flow operation as well as removing delivery point constraints as downstream delivery point operators agree to accept off-spec gas from Cheyenne Plains.

Operators of the following delivery points have agreed to waive their carbon dioxide (CO2) gas quality requirement and to accept gas that contains up to 3% CO2 at rate not to exceed the following quantities until further notice:

Cheyenne Plains said Friday it can continue to make tariff quality deliveries to Southern Star at the Sand Dune Meter (SDM) delivery point at approximately 150 MMcf/d, based on current gas quality specifications.

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