TransCanada Corp. (NYSE: TRP) said June 8 it cannot move natural gas until further notice through the section of its Leach Xpress pipeline in West Virginia that ruptured early the day before until, prompting customers to seek other pipelines to ship their gas.
The blast that shut the pipe did not cause any injuries and was contained in the morning on June 7, TransCanada said.
The 1.5-Bcf/d Leach Xpress in West Virginia and Ohio, which entered full service at the start of this year, transports gas from the Marcellus and Utica shale formations in Pennsylvania, Ohio and West Virginia to consumers in the U.S. Midwest and Gulf Coast.
The 12,000-mile (19,312-km) pipeline system, which TransCanada acquired in 2016, serves millions of customers from New York to the Gulf of Mexico.
Columbia Gas Transmission (TCO), the TransCanada subsidiary that operates the pipe, declared a force majeure on June 7 and said the damaged section of pipe could affect movement of about 1.3 Bcf/d. One Bcf/d is enough gas for about 5 million U.S. homes.
Despite the pipeline shutdown, overall output in the Marcellus and Utica shale gas region of Appalachia increased to 27.4 Bcf/d on June 7 from 27.3 Bcf/d on June 6, according to Thomson Reuters data.
U.S. oil and gas exploration company Range Resources Corp. (NYSE: RRC), which uses the Leach pipeline to transport its gas to market, said June 7 it expects to temporarily lose access to its 300 MMcf/d of capacity on the pipe.
As it reroutes gas to other pipes, Range said it does not anticipate impacts to production volumes and also said it currently expects the impact to second quarter cash flow to be minimal.
S&P Global Platts said several gas producers whose gas normally flows on the Columbia system reported just minor impacts, including Southwestern Energy Co. (NYSE: SWN), which like Range said it was utilizing a variety of pipelines in the area to get its production to market.
Alternative pipelines to route production around the outage included Energy Transfer Partners LP's (NYSE: ETP) Rover, Tallgrass Energy Partners LP's (NYSE: TEP) Rockies Express, EQT Midstream Partners LP's (NYSE: EQM) Equitrans and Enbridge Inc.'s (NYSE: ENB) Texas Eastern Transmission, analysts at S&P Global Platts said in a note.
The Leach shutdown caused Appalachia prices to trade in opposite directions on June 7, with TCO up about 11 cents, while Dominion South dropped about 39 cents, according to data from SNL, another unit of S&P Global.
Recommended Reading
ProPetro Adds Exxon Designee Volkov to Board
2024-05-14 - Alex Volkov is currently the transition executive tasked with planning the integration of Pioneer Natural Resources and Exxon Mobil.
Imperial Oil Names Exxon’s Gomez-Smith as Upstream Senior VP
2024-04-30 - Cheryl Gomez-Smith, currently director of safety and risk at Exxon Mobil’s global operations and sustainability business, will join Imperial Oil in May.
Exxon Mobil, Chevron See Profits Fall in 1Q Earnings
2024-04-26 - Chevron and Exxon Mobil are feeling the pinch of weak energy prices, particularly natural gas, and fuels margins that have cooled in the last year.
Exxon Appoints Maria Jelescu Dreyfus to Board
2024-05-08 - Dreyfus is CEO and founder of Ardinall Investment Management, a sustainable investment firm, and currently serves on the board of Cadiz Inc. and Canada-based pension fund CDPQ.
ProPetro to Provide eFrac Services to Exxon’s Permian Operations
2024-04-29 - ProPetro has entered a three-year agreement to provide electric hydraulic fracturing services for Exxon Mobil’s operations in the Permian Basin.