Fire continues at Wyoming natgas facility, disrupts supply -Williams

by Reuters
Thursday, 24 April 2014 17:52 GMT

(Adds comment from emergency managers, pipeline authority)

NEW YORK, April 24 (Reuters) - A fire is still raging at Williams Companies Inc's natural gas processing plant in southwestern Wyoming, which exploded on Wednesday afternoon and disrupted regional supplies, the company and local emergency responders said On Thursday.

Williams has shut gathering pipelines that run to its Opal, Wyoming, facility, interrupting nearly 1 billion cubic feet per day of output, company spokeswoman Michele Swaner said. That is about 1.5 percent of daily U.S. supply.

The Williams plant feeds into the Opal hub, a grouping of five pipelines and several processing plants that move about 4-5 bcf/day of natural gas at this time of year, mostly to Western states, according to the Wyoming Pipeline Authority.

With the length of the outage unknown, traders said the cash natural gas basis in the Western United States was stronger on Thursday. One trader said the impact will be minimal, barring a prolonged shutdown.

The Opal natural gas basis for May delivery was up 2.5 cents early Thursday, although no trades were reported on the Intercontinental Exchange (ICE).

"They are waiting for the fire to burn itself out before they can get into the facility," said Stephen Malik, a public information officer with Lincoln County, where the plant is located.

Malik said evacuation orders for the 100 residents of the town and 42 employees of the plant are still in place, but a nearby highway that was shut on Wednesday has reopened to traffic.

No injuries were reported and the cause of the fire, which broke out at 2 p.m. MDT (2000 GMT) on Wednesday, is unknown.

The blast is at least the second explosion at a Williams plant in four weeks. A fire and explosion damaged the company's liquefied natural gas facility in rural Washington state in late March.

The latest outage comes at a time when natural gas stocks are at 11-year lows following high demand during an especially brutal winter. Analysts are concerned that the industry will not be able to restore depleted inventories by the start of next winter.

Williams' Opal plant can produce about 2 percent of U.S. daily natural gas supply but has been running at less than full capacity, according to the company.

It processes natural gas from local wells by stripping out impurities before dry gas is injected into pipelines. Natural gas liquids are separately sent to different pipelines.

The other parts of the hub continued normal operations on Thursday.

"That specific source of supply from Williams is shut in. The other processing plants and all the other pipelines are unaffected and continuing to flow," said Brian Jeffries, executive director of the pipeline authority. (Reporting by Selam Gebrekidan and Scott Disavino in New York and Terry Wade and Eileen O'Grady in Houston; Editing by Lisa Von Ahn and Dan Grebler)

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