An event that temporarily dropped gas prices to lows of 90 cents in the Rockies and led to widespread gas flow disruptions was over in a matter of days last week. With help from Kinder Morgan, EnCana and others, Wyoming Interstate Co. (WIC) managed to resume full pipeline operations late Thursday afternoon, five days after the driver of a bulldozer working on the Rockies Express pipeline caused a pipeline explosion on WIC about 10 miles south-southwest of Cheyenne, WY.
The rupture stopped about 770 MMcf/d of gas that flows to the Cheyenne Hub in northern Colorado.
“We’ve been working pretty hard at it since Saturday…,” said El Paso Corp. spokesman Richard Wheatley early last week. “We started moving pipe to the scene Saturday night [The rupture occurred 9:30 a.m. MST on Saturday]. We were fortunate that we were able to source some available pipe that was in a storage yard at Wamsutter, WY. We benefited from the cooperation of Kinder Morgan. That was some of their pipe that was in storage.” EnCana also provided some pipeline that it had for the Entrega pipeline project.
The pipeline rupture, which was in a very remote area of ranch land, led to a massive fireball that rose hundreds of feet in the air. The fire was extinguished Saturday afternoon. “You’ve got a crater estimated to be about 17 feet deep and 30 feet in diameter,” said Wheatley. “When I was there [Sunday] the bulldozer was still in the hole. The deceased man had been removed from the scene at that time. The 36-inch [diameter] pipeline had been laid bare. We have an investigation ongoing into what occurred. Apparently it was a situation involving the caterpillar operator coming in contact with the line.”
The bulldozer operator was later identified as Bobby Ray Owens Jr., 52, of Louisiana, an employee with Associated Pipe Line Contractors Inc. of Houston. Kinder Morgan said it temporarily halted work on this portion of the Rockies Express project, a $4.4 billion pipeline system that will eventually cross 1,663 miles and reach Clarington, OH, transporting as much as 1.8 Bcf/d of gas to eastern markets.
The WIC rupture occurred on the Duck Creek Ranch, which is about two miles north of the Colorado state line. WIC stretches 600 miles from southwestern Wyoming to eastern Wyoming and northern Colorado. Its terminus is at the Cheyenne Hub where multiple other systems, including Cheyenne Plains, receive gas and take it to markets along the Front Range of the Rockies, the Midcontinent and the Midwest. The entire WIC system has a design capacity of about 2 Bcf/d.
WIC declared a force majeure on Saturday and said in a bulletin board notice that all transport volumes through the Laramie, WY, compressor station were shut in and scheduled to zero.
Williams, which is a major producer in the Rockies with about 500 MMcf/d coming out of the Piceance and Green River basins, said it was forced to temporarily shut in some of its production because of the outage, but reported minimal impact because of several alternative transportation routes. Williams flows about 209 MMcf/d of gas along the WIC/CIG route from southwestern Wyoming to the Cheyenne Hub.
EnCana, the region’s largest producer, said the impact on its operations was “pretty minimal.” EnCana spokesman Alan Boras said about 65 MMcf/d of its production was directly impacted by the rupture but was rerouted or put into storage.
Based on nominations for gas flows last Tuesday, about 745 MMcf/d of gas that would normally flow on WIC to the Cheyenne Hub was not being delivered, according to data provided by Denver-based consulting firm Bentek Energy. The outage sent gas prices to lows not seen in years on Monday, including a 90-cent low on Colorado Interstate Gas (CIG) and an average of $1.31. Questar’s average Monday was $1.37 and Opal was at $1.90.
Bentek, which collects gas flow data from pipelines nationwide, said only about 114 MMcf/d of the lost supply showed up on other pipelines in the region on Tuesday. The company estimated that 401 MMcf/d of production might have been curtailed. “What’s still getting through to Cheyenne Hub is mostly gas from Medicine Bow,” the pipeline lateral that collects production from the Powder River Basin, said Bentek’s Rusty Braziel. About 959 MMcf/d of gas was flowing to the Cheyenne Hub on the Medicine Bow lateral on Tuesday, up about 11 MMcf/d from what flowing on average Nov. 1-10.
Based on nominations on pipeline systems downstream of the Cheyenne Hub, there also were significant reductions in flowing gas into Trailblazer, Cheyenne Plains, Kinder Morgan Interstate, CIG at Dover and Xcel/Public Service Co. of Colorado.
Farther downstream in the Midcontinent region, deliveries also were reduced into NGPL’s Amarillo Leg — which saw a $1 price increase on Monday — into Northern Natural, Panhandle Eastern, ANR, Kansas Gas Service and Southern Star.
Cash prices came roaring back in the Rockies on Tuesday for Wednesday’s gas day after WIC told the market it would have 550 feet of new pipe installed and ready for full service. High winds, snow and colder temperatures through the region also helped lift prices. Cash prices jumped more than $4/MMBtu in some cases to the $5.40s.
However, WIC was unable to complete the repairs until Thursday afternoon. Despite the two-day delay, the restoration was a fairly quick turnaround after such a devastating event.
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