February 24, 2011 / 5:11 PM / 8 years ago

UPDATE 3-Chesapeake shuts Pa. gas-drilling wells after fire

 * Three people injured after fire at drilling site
 * Blaze extinguished on Wednesday night
 * Wells closed at site after fire
 * Well testing was underway when fire broke out  (Updates with new detail and company quotes)
 By Edward McAllister and Eileen Moustakis
 NEW YORK, Feb 24 (Reuters) - Chesapeake Energy (CHK.N) said on Thursday it had shut its wells at a natural gas drilling site in the Marcellus Shale in western Pennsylvania, after a fire late the previous day injured three people.
 The blaze, which raged for three hours, was caused by a flash fire in storage tanks used to hold natural gas liquids at the Powers well site in Avella, operated by Chesapeake subsidiary Chesapeake Appalachia LLC.
 The company was testing initial production volumes from the wells on-site when the fire broke out, Chesapeake said. It was unable to say if the well testing was linked to the fire.
 “As a result of the flash fire the first of five 500-barrel storage tanks caught fire, igniting the others,” Chesapeake said in a statement. The cause of the fire was not yet known.
 “Three wells on the pad were closed when the incident happened. The wells will remain shut-in until the on-site investigation is completed,” the statement said.
 The fire occurred while gas condensate produced at the wells was being transferred into storage tanks, a spokeswoman for the Department of Environmental Protection (DEP) in Pennsylvania said. The DEP is investigating the cause of the fire alongside Chesapeake.
 Three workers were taken to hospital following the fire. Two of them, more severely injured, were flown from the site, the DEP spokeswoman said. Both were “acutely ill”, said a spokeswoman for the University of Pittsburg Medical Center where the two men were sent.
 The drilling wells were not directly affected by the fire, the DEP and Chesapeake said.
 “The wells involved had already been completed, including hydraulic fracture stimulation,” Chesapeake’s statement said.
 Hydraulic fracturing, or fracking, is a drilling technique used to release gas and oil trapped in shale by blasting a mixture of sand, water and chemicals into the rock.
 Chesapeake Energy, which on Wednesday said it was considering building its own hydraulic fracturing business, has 27 rigs operating in the large Marcellus shale play that stretches across parts of Pennsylvania and neighboring states.
 Chesapeake’s daily production from Marcellus is 185 million cubic feet of natural gas equivalent, according to the company website.
 Gas drilling in Pennsylvania, and in particular in the Marcellus Shale, has drawn the attention of major energy companies due to estimates that the region holds enough gas to meet total U.S. needs for a decade or more.
 But attention is also being drawn to the region by groups concerned about possible health risks from controversial fracking techniques.
 Shares of Chesapeake on the New York Stock Exchange were up marginally on Thursday afternoon. They ended 7.2 percent higher at $34.33 on Wednesday after company results topped expectations.  (Additional reporting by Anna Driver in Houston; Editing by Marguerita Choy, Dale Hudson and Sofina Mirza-Reid)   

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