Transco reported sending a force majeure notice to customers under the ESS and EESWS rate schedules. The pipeline explained that on Dec. 26 it detected a large, unexpected pressure drop in one of seven caverns at Eminence Storage Field in Covington County, MS. Eminence is the facility that supports the service for affected customers. Two days later Transco determined that gas was leaking from Cavern 3 and since then has reduced the cavern’s pressure by venting and flaring gas. On Jan. 4, Transco continued, based on a determination that the reduced pressure in Cavern 3 created a risk to the salt pillars separating it from adjacent Caverns 1 and 2, the pipeline began to reduce the pressures of Caverns 1 and 2 by withdrawing gas from them. During those operations, on Jan. 15 Transco discovered gas escaping from the ground around the wellhead for Cavern 1. It continued to safely withdraw gas from Caverns 1 and 2, and by Jan. 24 their pressure was low enough to avoid potential effects on Cavern 3. However, due to the leak at Cavern 3 and the damage to the well at Cavern 1, both are out of service, and that prompted last Thursday’s force majeure declaration, Transco said. Determining that neither cavern can be returned to service, it plans to file an application with FERC seeking to abandon them. Transco estimates that due to the force majeure event, Eminence is capable of providing about 70% of contracted capacity and 92% of contracted deliverability. The field’s daily injection capability is not affected.
Explained
Articles from Explained
Annual Reporting Threshold Comes Under Scrutiny at FERC
The threshold for annual natural gas purchases and sales that would trigger a new reporting requirement for companies came under the most scrutiny in comments filed this week at FERC, with interstate pipelines, gas marketers, major producers and industrial customers calling for a change. Independent producers were among the few industry sectors to support the proposed threshold.
Industry Briefs
An apparent drop in Texas natural gas production over the first nine months of 2005 compared to that period in 2004 is just not so. It can be explained by companies falling behind in reporting, according to a spokesperson with the Texas Railroad Commission (RRC). Reporting was delayed for producers affected by Katrina, and several other large operators also are behind in reporting, Ramona Nye said. Numbers posted on the RRC website for the first three quarters of 2005 show production of 4,162 Bcf of gas, compared to 4,496 Bcf a year earlier. “Production is not down. There are a number of them that haven’t gotten their reports in.” The numbers continue to be adjusted for about six months after they are first posted. “They always go up,” Nye said.
S&P Explains Why Dark Clouds Still Hover Over El Paso, Williams
Standard and Poor’s Rating Service explained the reasons for assigning a “B” rating and negative outlook on both El Paso Corp. and The Williams Cos. Inc. in a new report released on Friday. The two companies have “consistently underperformed in terms of meeting financial target expectations” mainly because of the poor performance of their marketing and trading divisions, which despite being either significantly reduced, as in Williams’ case, or on the fast track toward being completely dissolved, as in El Paso’s case, could continue to be a draw on cash, S&P said.
