Texas Eastern Gas Pipeline Explodes in Kentucky
P&GJ Staff Report
HOUSTON (P&GJ) – Enbridge responded to an explosion on Line 10 of its Texas Eastern Transmission Co. (Tetco) system in Fleming County, Kentucky, and said Tuesday that it has shut-in a section of the pipeline and secured the area. No injuries were reported.
The incident has reportedly impacted more than 1 billion cubic feet of daily north-to-south capacity on the system, sending natural gas futures higher after gaining Monday on falling production and higher anticipated demand due to predicted cold weather.
Line 10 is a 30-inch pipeline that is part of Enbridge’s Texas Eastern Natural Gas system.
Toronto-based Enbridge releases a brief statement in response to the blast.
“Enbridge is continuing to respond to the incident that occurred at approximately 5:00 p.m. ET, Monday, May 4, 2020, on its Line 10 natural gas pipeline in Fleming County, Kentucky. There were no injuries,” the company said.
“Our crews are on site and have secured the area. The impacted section of pipe was shut-in following the incident and remains isolated.”
Enbridge said it has notified county, state and federal agencies and officials and reportedly notified customers of a force majeure event resulting in an unplanned outage.
Genscape analyst Josh Garcia said in a note to clients early Tuesday morning that the blast occurred north of its Owingsville Compressor and “just upstream” of where an Enbridge pipeline explosion occurred in 2019.
“As a result, north to south capacity through Owingsville will be reduced from 1.33 Bcf/d to zero beginning on gas day May 5 and will last for the immediate future,” Garcia wrote, adding that the damage to “one of its main export lines … will force reroutes in the region and possibly cause shut-ins.”
Reuters reported today that U.S. natural gas futures jumped to a 16-week high on the pipeline shutdown, forecasts for cooler weather next week and slower output as shale drillers hit by collapsing crude prices shut oil wells that also produce a lot of gas. Futures had already risen to a 15-week high on Monday.
"This week’s rally continues to be driven by reports of diminished associated gas production (while) near-record cool will support lingering heating demand," said Daniel Myers, market analyst at Gelber & Associates in Houston.
The U.S. Energy Information Administration (EIA) projected gas production will fall to an annual average of 91.7 Bcfd in 2020 and 87.5 Bcfd in 2021 from a record 92.2 Bcfd in 2019 as energy firms cut spending on drilling.
The EIA projected coronavirus lockdowns will cut U.S. gas consumption to an average of 83.8 Bcfd in 2020 and 81.2 Bcfd in 2021 from a record 85 Bcfd in 2019.
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