Thousands shiver in Manitoba as pipeline blast cuts gas supply

WINNIPEG, Manitoba Mon Jan 27, 2014 12:28pm EST

WINNIPEG, Manitoba Jan 27 (Reuters) - Thousands of Manitoba residents were without natural gas to heat their homes and businesses for a third frigid day on Monday, following a weekend explosion along a TransCanada Corp pipeline in the Western Canadian province.

The temperature on Monday morning in southern Manitoba hovered around -29 Celsius (-20 Fahrenheit). The electricity grid continues to operate.

The explosion and fire happened early Saturday near Otterburne, Manitoba, about 50 km (31 miles) south of the provincial capital, Winnipeg. No one was hurt in the blast, which a witness said shot flames up to 300 meters into the sky.

The incident interrupted the supply of natural gas to 4,000 residents and other customers, although TransCanada arranged for tanker trucks to deliver compressed natural gas to a hospital and nursing homes.

TransCanada was working on restoring the gas supply to the area in two stages, starting with residents and other customers north of the damaged pipeline, said Scott Powell, spokesman for Manitoba Hydro, a provincial government-owned energy company.

Powell said he could not estimate when gas might flow again, since TransCanada is handling the work, but said Monday night might be a possibility.

TransCanada did not respond to requests for comment on Monday. On Sunday afternoon, the company said it had no estimate of when gas supply will be restored.

Among those affected, privately owned Bothwell Cheese Inc was forced to halt production on Monday because its equipment relies on natural gas.

"Everyday we're (normally) producing over six figures worth of cheese, so if we can't make that up and we end up losing that, it will impact our revenue by that much," Bothwell Chief Executive Ivan Balenovic said in an interview.

Balenovic said the employees he had spoken with were able to find ways to keep their homes heated.

Saturday's explosion on one pipeline may also have damaged two other lines, which were taken out of service, according to Xcel Energy Inc, a Minneapolis-based energy company that relies on natural gas from pipeline service provider Viking Gas Transmission, which is supplied by TransCanada.

By Sunday afternoon, one of the pipelines was back in service, and Xcel senior vice-president of operations Kent Larson said the company expected to be operating normally by Monday afternoon.

Xcel lifted an earlier appeal to customers in North Dakota and Minnesota to turn down their thermostats to conserve gas, and said it would likely do the same for western Wisconsin customers around noon Monday.

TransCanada Corp's mainline pipeline system supplies natural gas from Western Canada to markets in Manitoba, Ontario, Quebec and the U.S. northern tier states. However shipments on the system, which uses a number of separate lines, have waned as shale gas from fields such as the Marcellus in the Eastern United States supplant more distant supplies.

The incident comes as the safety record of pipeline operators faces increased scrutiny.

Plans are under way for construction of several export terminals on the Pacific Coast with the aim of making Canada, the world's No. 3 producer of natural gas, an exporter of liquefied natural gas to Asia.

Some of the new terminals would require new gas pipelines.

Shares of TransCanada rose slightly on Monday morning to C$48.48 on the Toronto Stock Exchange.

Canada's National Energy Board and the Transportation Safety Board are investigating the cause of the blast.

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