About 1 Bcf/d of flow on El Paso’s South Mainline downstream ofPecos River (NM) Station ceased after the pipeline exploded earlySaturday, killing 10 people and seriously injuring two others at anearby campsite (see related reports:wrap-up, politics).

El Paso said Monday it was able to compensate for about halfthat volume through a combination of fuel switching by downstreamcustomers, maximum storage withdrawals, an OFO and other customercooperation.

The market reaction was rather predictable as all threeCalifornia points rose by about 35 cents to lead an overall pricesurge. However, utilities in the state did not appear to beexperiencing any supply problems. SoCal Gas said storage andsupplies from other Southwest receipt points were adequate to avoidany problems. A gas operations official for Los Angeles Dept. ofWater and Power also saw no reason for panic. From past similarincidents on Southwest pipelines, he expected that theapproximately 80-feet-long section missing from El Paso’s linecould be “slapped back into place rather quickly.”

El Paso itself had no estimate for when it can restore servicein the impacted segment; it must get approval from the federalinvestigators before beginning repairs or evaluating a restart ofthe adjacent lines. But a large aggregator and a marketer agreedwith the LADWP official that it should be “a quick mechanical fix”once repairs begin. The aggregator believed downtime could be asshort as a week.

No customers were cut off as a result of the rupture but somewere getting reduced volumes, an El Paso spokeswoman said.

Northern Natural Gas was seeing a throughput increase of 200-300MMcf/d Monday while Transwestern volumes were up 50-75 MMcf/d as aresult of shippers diverting gas away from El Paso’s SouthMainline, an Enron spokeswoman said. A producer said she divertedas much of her company’s gas as possible from El Paso toTranswestern.

People were reluctant to trade Permian Basin gas Monday,especially at fixed prices, because of doubts about how much wouldbe able to flow, several sources said. Permian numbers rose alittle less than 18 cents as part of the general upturn. However,it was Waha prices that saw a bigger increase of nearly 30 cents asa result. “Everything in El Paso-Permian’s Keystone pool was goingback into Waha,” said a marketer, putting Waha in the mid $4.60s ata premium of more than a nickel above Henry Hub.

The Southern California border, at an average of nearly $5.30,led the rest of Monday’s market by a large margin. Before tradingbegan, EnronOnline was offering border swing swaps for the rest ofthe month at $5.85-95, a marketer said. With swing swaps priced sohigh, it gave sellers more confidence in what prices they couldcommand in the day market, he said. “Either way, I wouldn’t want tobe short right now at the border.”

There were lots of rumors but no facts available on what causedthe El Paso rupture, noted one aggregator. “But it’s a good thingit didn’t happen until after California had cooled off. Otherwise Icould easily have seen the border basis spread from San Juan Basingo as high as $2.50” instead of the approximate gap of $1.70registered Monday by Daily GPI.

A knowledgeable source provided his analyis of the blast: Thestructure of the crater made the rupture “look like a lineintegrity problem from the way it blew out.” The earth can harborleaking gas for a while until eventually everything all goes up atonce. People nearby would not have detected anything because gas isodorless in long-haul lines; the mercaptan odorant is not addeduntil it gets to the local distribution stage. Pipeline safetysurveyors usually will look for dead vegetation in the vicinity todetect a leak, but this was a desert area with very littlevegetation. It is easily possible for escaping gas to hug theground for the approximate 500-foot distance to the victims’campsite and seek an ignition source there. It is a normal tendencyfor gas leaking into the atmosphere to stay close to the ground,and that tendency would have been amplied by the chilliness of thepre-dawn desert.

The source went on to say, “I think there will be lot more ofthis [ruptures] in the future with many pipes becoming at least40-50 years old.” El Paso was unlucky in experiencing one of theearly incidents, he said, because the situation applies to theother lines with old pipe. Pipelines used to spend a lot more moneyon maintenance when regulation was tighter and they were stillpaying for depreciation, he said. “Now they’re more purelyfor-profit companies after having written off their [depreciation]costs many times over.”

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