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.
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