Natural gas markets were focused on the Rockies on Monday as El Paso Corp. said an “equipment fire” Sunday 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 Sunday from CIG and WIC into Cheyenne Plains were 83,610 Mcf/d and 82,367 Mcf/d, respectively.
With restrictions on Rockies gas flowing out of the area, cash market points in the region headed lower (see related story). Some traders also said the outage helped natural gas futures prices to soar (see related story). October natural gas futures jumped 37.4 cents to $6.653 on Monday.
“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 are zero today. 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. We don’t have a cause for the incident, but an investigation is under way.”
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.”
Late Monday, El Paso announced that beginning with cycle 4 nominations that day, Cheyenne Plains would commence free flow operation until further notice. That resulted in these conditions:
Thus far, El Paso said the following delivery points have agreed to waive the 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:
If Cheyenne Plains is able to obtain waivers for other delivery points, the company said it will post additional information. El Paso said Cheyenne Plains can continue to make tariff quality deliveries to Southern Star at the Sand Dune Meter delivery point in from the range of 150-200 MMcf/d.
“We expect the free flow operation to continue at least through October business,” El Paso said.
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