Pacific northwest refiners shut on nat gas outage

Portland gasoline prices shot higher today after a key natural gas line rupture in Canada forced Pacific northwest refiners to shut units.

Marathon Petroleum, Phillips 66 and Shell confirmed shutting units at 366,000 b/d of Washington refining capacity after Enbridge shut a portion of its 1.6 Bcf/d (45mn m³/d) Westcoast Energy natural gas mainline. BP could not be immediately reached for comment on the status of its 222,700 b/d refinery, the region's largest.

A rupture and fire last night shut the 36-inch pipeline, a major source of gas supply for the Pacific northwest, from compressor station 2 in Canada to the US-Canadian border near Huntingdon, British Columbia (BC). The pipeline provides about 1 Bcf/d of Canadian gas to the US.

The fire was extinguished and the affected segment, as well as a neighboring pipeline, was depressurized.

"We recognize the impact this will have on customers," Enbridge said today. "We are working diligently to try to resolve the situation in a manner that minimizes the disruption of gas supply."

Portland sub-octane gasoline shot higher by 40pc, to a 35¢/USG premium to benchmarks, as refiners confirmed shutdowns for the lack of natural gas. Ultra-low sulfur diesel (ULSD) rocketed from a 1.5¢/USG discount to a 7¢/USG premium. Natural gas provides energy, heats steam and allows the cheap generation of hydrogen, all essential especially to the production of low-sulfur transportation fuels demanded along the coast.

Puget Sound Energy, the largest utility in Washington state, has asked customers to conserve natural gas and electricity today because of the disruption.

Canadian energy regulators, the National Energy Board, sent inspectors today to the site of the rupture, near Prince George, BC. No injuries were reported as a result of the fire, but about 100 people in the Lheidli T'enneh First Nation were evacuated following the incident, Enbridge said.