* Chevron orders drawdowns from nearby gas storage
* Pipeline companies halt throughput on local lines
By Jeanine Prezioso
NEW YORK, Aug 8 A sinkhole the size of a
football field in southern Louisiana has forced energy companies
to halt nearby natural gas pipeline activity and draw down fuel
from a local storage cavern.
Chevron Corp's subsidiary Bridgeline Holdings
declared force majeure on new injections into its salt dome
storage facility near the sinkhole and the town of
Napoleonville, through the rest of the year, according to notice
to customers posted on its website.
Customers were also asked to begin reducing their current
storage inventory to 40 percent of each of their currently
contracted amount, according to the Bridgeline filing.
Natural gas traders said Chevron's move to purge the gas
could push an additional 4 billion to 5 billion cubic feet of
gas on the market. U.S. September and October futures prices
settled lower, while winter months settled higher on Wednesday,
and traders said companies could be scrambling to sell supplies
while locking in winter gas to meet heating demand.
"Chevron Pipeline Co has elected to take the step of drawing
down the NS1 cavern as a precaution to ensure that we are doing
everything possible to protect public safety and the
environment," said Gareth Johnstone, a Chevron spokesman.
The sinkhole, which local media reported was 372-feet wide
(113 meters), was discovered near the cavern on Friday, and has
consumed full-grown trees. Sinkholes occur when underground
spaces or caverns become so large they can no longer support the
land above them, causing a collapse.
There is no indication that gas is leaking from the
facility, Johnstone said, adding there was no evidence that the
integrity of the cavern was at risk.
Louisiana Commissioner of Conservation James Welsh issued a
Declaration of Emergency on Friday due to the sinkhole, located
in a region of wooded swamp in Bayou Corne. The Texas Brine
Company, which has a plugged salt cavern within 100 yards of the
sinkhole, was ordered to investigate the site.
"The objective is to determine if the cavern has a direct
relationship to this event," said Mark Cartwright, president of
subsidiary Texas Brine Company Saltville, LLC. "The obvious
conclusion is of course it does, but we don't know yet."
"This is very puzzling."
Unexplained bubbles discovered in the region in recent
months had been under investigation by state, local, and federal
Tremors were also reported in the area before the sinkhole
appeared, state officials said, but the cause was still being
Enterprise Product Partners, owner of the Arcadian
Gas Pipeline System, said it was forced to shut two 20-inch gas
pipelines near the area, according to a spokesman. The gas has
been rerouted so the company has been able to continue
deliveries to customers, he added.
A spokeswoman for Crosstex Energy said the company
shut a portion of its 36-inch natural gas pipeline near the
sinkhole taking about 150 million cubic feet a day of supply
Customers have made other arrangements to source other
supplies, the spokeswoman said.
Chevron has three natural gas salt dome storage caverns in
the area with a total capacity to hold 12.7 billion cubic feet
of gas, according to the company website. The storage sites
connect with Acadian Gas Pipeline Company, Gulf South Pipeline
Company, and Florida Gas Transmission. Maximum withdrawal was
listed as 1.1 bcf per day.
"They are worried about the cavern integrity and the slurry
breaching the salt dome that they have," said Genscape senior
natural gas analyst Andy Krebs.
"If there was anybody that did have gas in storage looking
to play to winter, they're going to have to pull it out now."
Napoleonville is located in Assumption Parish in
southeastern Louisiana with a population of 660 as of 2010,
according to City-Data.com.