By Scott DiSavino Feb 13 (Reuters) - U.S. natural gas pipeline company NiSource Inc said it shut part of its key Columbia Gulf Transmission interstate natural gas pipeline following an explosion in Adair County, Kentucky that injured at least one person. The blast early Thursday morning engulfed and destroyed homes and cars, authorities said. The explosion and fire in Knifley, Kentucky, about 90 miles (145 km) south of Louisville, could be seen "just as plain as day" from Columbia, about 12 miles from the blaze, a local police officer said. "Columbia Gulf operating teams detected a drop in pressure on the company's Line 200 pipeline in Adair County. Our operating crews immediately responded to the alert and determined that there was a rupture in the pipeline," the company said in a statement. "We activated our emergency response procedures and took steps to isolate the damaged portion of the pipeline. The flow of gas was stopped to the damaged pipeline shortly thereafter," the statement said. "We don't yet know the cause but will be working with the appropriate authorities to conduct a thorough and complete investigation," the company said. Columbia Gulf Transmission consists of approximately 3,400 miles of pipeline and 11 compressor stations with nearly half-a-million horsepower, located primarily in Louisiana, Mississippi, Tennessee and Kentucky, according to the company website. The Columbia system is interconnected to virtually every major pipeline system operating in the Gulf Coast and interconnects with pipelines serving markets in the Midwest, Southeast and Northeast. Police were notified of an explosion at about 1 a.m. local time (0700 GMT) on Thursday, Thomas, the Adair County official, said. The explosion spawned multiple woodland and structural fires, Thomas said. Three homes were set ablaze, two of them were fully destroyed, as well as two barns and four cars. The one injured person was sent to an area hospital but the extent of injuries was not known, Thomas said. In addition, some in the community near where the pipeline exploded were evacuated. The fires had largely been contained and were being allowed to burn out, said Adair County Emergency Management Director Greg Thomas. BAD DAY TO LOSE A PIPELINE Natural gas traders and analysts said this was a tough day to lose a big pipeline due to the winter storm battering the East Coast. The pipeline supplies some of the fuel used to heat millions of homes and businesses in the Northeast and Midwest. "An explosion on a major pipeline from the Gulf Coast to the Northeast could send spot natural gas prices in the Northeast soaring," said Phil Flynn of Price Futures Group in Chicago. It is too early for next-day natural gas prices to trade on the IntercontinentalExchange. On the New York Mercantile Exchange, natural gas futures for March were trading up about 3.2 percent, or 15 cents, to $4.975 per million British thermal units at 7:06 EST. Columbia Gulf is part of NiSource's Columbia Pipeline Group, which owns and operates more than 15,700 miles of natural gas pipelines serving customers in more than 16 states and one of the largest underground storage systems in North America. Approximately 1.3 trillion cubic feet of natural gas flows the Columbia Pipeline systems each year, according to the company's website.