An explosion Wednesday at Williams' 1.5-Bcf/d Opal Processing Plant in Wyoming was continuing to significantly cut into Rockies flows Thursday and helped lift Western spot gas and forwards prices.
Prior to the incident, Opal plant receipts were averaging 0.95 Bcf/d, according to Platts unit Bentek, which also showed total Rockies production down a net 400,000 Mcf/d as gains in other areas of the region partially offset the plant closure.
Bentek showed Rockies production at 7.5 Bcf on on Thursday, compared with a month-to-date average of 8.4 Bcf/d.
With Opal showing no trading activity on IntercontinentalExchange, Kern River Gas Transmission, receipts, spot prices averaged around $4.73/MMBtu on ICE, up about 10 cents from Wednesday.
Northwest Pipeline's Wyoming Pool was up about 7 cents to average around $4.66/MMBtu on ICE.
Downstream in the California consuming markets, Pacific Gas & Electric city-gate spot gas averaged around $5.30/MMBtu on ICE, up 10 cents from Wednesday. Southern California Gas' city-gate averaged around $5.10/MMBtu on ICE, also up 10 cents.
In the Midwest, a trader said the explosion was pricing some transport out of the money, but not causing any real movement in prices in that region. The trader said inflows from the Midcontinent supply regions would likely offset most of the lost Rockies production.
Williams, in a statement Wednesday, said that it was too early to determine the extent of damage to the facility or a timeline for return to service. Once it is safe to return to the plant, Williams will conduct a thorough investigation into the cause of the incident in cooperation with regulators, the company said.
While the market awaits word on how long the repairs will last, a Western market trader said some May index premiums were increasing amid the uncertainty.
The trader said forwards prices were increasing at Northwest-Rockies, Kern River, Receipts, and SoCal Gas.
On ICE, Northwest-Rockies May basis was trading around minus 17 cents/MMBtu, up from minus 22.25 cents/MMBtu Wednesday.
SoCal Gas May basis was at about plus 8 cents in early ICE trading, up from plus 4.75 cents/MMBtu Wednesday.
An Eastern market trader said the price impacts are mostly contained within the Rockies. He said it is too early to tell whether the price effects would spread into other regions if the problems at the Opal plant linger, but he doubts it would have much of an effect on other parts of the country.
Platts unit Bentek said Opal evening cycle nominations for Thursday's gas day were cut to zero. Prior to the incident, the Opal plant was delivering 51% of its volumes to Kern River Transmission, 38% to Ruby Pipeline, 8% to Overthrust and 4% to Northwest Pipeline.
Additionally, natural gas gathering from surrounding producing areas is temporarily suspended as a result of the incident. The company is evaluating alternatives so that natural gas production can resume as soon as possible, it said.
As of Thursday's evening cycle, Bentek showed receipts from Enterprise's nearby Pioneer plant were up just 152,000 Mcf/d day-over-day and up 165,000 Mcf/d from the 30-day average.
The explosion and fire occurred at approximately 2 pm MDT (2000 GMT) at the facility in Lincoln County, Wyoming, near the town of Opal. There were no reported injuries or damage to property outside the facility.
The facility was immediately shut down and emergency procedures were activated. All personnel were safely evacuated from the facility, Williams said.
First-responders evacuated an area that includes the town of Opal and closed Highway 30 in proximity to the plant.
The company said its top priority right now is ensuring the safety of its employees and surrounding community, as well as cooperating with the local authorities and regulatory agencies.
Williams said the incident is known to have affected TXP-3, one of the five cryogenic processing trains that comprise the Opal facility.
