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Carthage Explosion Leaves Damaged Facilities, Shut-In Gas

February 16, 2009
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CenterPoint Energy said Friday that one of its natural gas compressor stations was "heavily damaged" in the Wednesday explosion and fire near the DCP Midstream East Texas gas processing plant north of Carthage, TX. DCP Midstream has said the explosion was the result of a third-party pipeline rupture outside the company's property, but it was difficult to tell amidst the devastation at the blast site which of the confluence of pipelines in the area caused the accident.

"Our Champlin compressor station is very near the processing facility that experienced the fire," said Alicia Dixon, a spokeswoman for CenterPoint Energy. "The compressor station was heavily damaged as a result of their fire. It was an intermittent station that was not in use at the time, so there are no customer outages."

She said CenterPoint Energy's pipeline was not involved in the blast. No repair timeline has been established yet as the company is still in the damage-assessment phase. DCP Midstream also said its processing plant was not directly part of the explosion and fire and sustained no damage.

The Wednesday morning explosion sent flames soaring more than 50 feet. DCP Midstream employees immediately shut down the plant, blocked all pipelines feeding the complex and evacuated the premises. No employees or contractors were said to be injured in the incident. People living within a mile and a half of the plant were evacuated. Emergency crews from across Panola County responded.

"We are thankful no one was injured in this incident and commend our employees for their immediate response, shutting down the facilities to ensure safety for themselves and others in the area," said Richard Cargile, group vice president for operations of DCP Midstream. "We will seek to return our operations to service as soon as we are able to safely do so."

The Denver-based midstream services provider said there was no damage to the natural gas processing complex and a company-assembled investigation team was on site to assess damages to the Carthage Hub and to determine the scope of work to return the facilities to service. The East Texas complex has a processing capacity of approximately 780 MMcf/d with recent throughput of approximately 550 MMcf/d. The Carthage Hub has approximately 1.5 Bcf/d of delivery capacity.

Some producers addressed their exposure on Friday. Devon Energy Corp. said that while DCP Midstream's gas processing plant facilities were not damaged, pipelines leading into the area were temporarily shut in for safety reasons. "Currently, approximately 80 MMcf/d of natural gas and 7,900 b/d of oil and natural gas liquids are curtailed as a result of the outages," Devon said in a statement. "This represents about 3% of Devon's net company-wide oil and gas production. Devon expects to restore the curtailed volumes within two weeks."

The question of which company's pipeline ruptured remained unanswered on Friday. The plant interconnects with Gulf South Pipeline, Texas Gas Transmission, CenterPoint Energy Gas Transmission, Lone Star Pipeline, Southern Natural Gas, Tejas Gas, Enterprise Products, Tennessee Gas Pipeline and Texas Eastern Transmission and Texas Gas Gathering (TGG).

"Average deliveries from the plant are largely to Gulf South (200 MMcf/d), Texas Gas (160 MMcf/d) and CenterPoint (100 MMcf/d) for a total average delivery of around 460 MMcf/d. DCP Midstream notified Gulf South and Texas Gas that deliveries to the plant are now shut in and will remain shut in until further notice. Expect downward pressure on Carthage prices," Bentek Energy said.

A spokesman for EXCO Resources, which owns TGG, said it still isn't clear whose pipeline ruptured. "TGG is our wholly owned subsidiary. They do have a line running into that processing plant, but we weren't running any gas into the plant at the time," said Steve Smith, a spokesman for EXCO. "Our pipeline was damaged as were two or three other lines around us. It's hard to tell whose pipeline ruptured when all you have is a big old hole and four pipelines in the area. We are currently investigating the situation. The explosion shut in a little less than 2 MMcf/d of ours and it shut in about 10 MMcf/d from one of our customers. That is likely to be back on over the weekend."

The East Texas facility is operated by DCP Midstream and owned 75% by DCP Midstream and 25% by DCP Midstream Partners. DCP Midstream is a joint venture between Spectra Energy and ConocoPhillips.

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