Colorado flooding disrupts oil, gas production

Reuters News
Posted: Sep 17, 2013 3:29 PM
Colorado flooding disrupts oil, gas production

By Eileen Houlihan

NEW YORK (Reuters) - Historic flooding in northeastern Colorado which has killed eight people continued to disrupt oil and gas operations in the fossil-fuel-rich region, producers and energy companies said on Tuesday.

Canadian energy producer Encana Corp said 99 wells shut due to flooding in Colorado had returned to service, but nearly 300 remained shut in.

The company, which operates more than 1,200 wells in the Denver-Julesburg basin in Colorado, had begun inspections and was working with maintenance and production teams to repair and mitigate effects from the storm, a spokesman said in an email to Reuters.

"We still have not found any spills of any reportable quantity, but cannot rule out future discoveries until we get to everything," said spokesman Doug Hock.

Anadarko Petroleum Corp, meanwhile, said approximately 670 operated wells and 20 miles of pipeline were out of service, while four of the company's 13 operated production rigs in the Wattenberg field had ceased operations due to problems accessing roads.

The company operates 5,800 wells and 3,200 miles of pipeline.

In a statement the company said natural gas processing and compression had not been affected. Some work may be delayed until road repairs and conditions allow for equipment transport.

"We expect to be able to better assess our facilities as floodwaters continue to recede and road access improves," the statement said.

On Monday, Young Gas Storage Co, in Morgan County, Colorado, declared force majeure due to the exposure of a natural gas lateral leading to the gas storage facility.

The line was taken out of service.

The Young Storage site is a joint venture owned by subsidiaries of Kinder Morgan Inc, Xcel Energy and Colorado Springs Utilities, according to its website. It has a working gas storage capacity of approximately 6 billion cubic feet.

Also on Monday, Colorado Interstate Gas (CIG), an El Paso Pipeline Partners company that operates a 4,300-mile pipeline system transporting Rockies gas to customers in Colorado, Wyoming and other western states, declared force majeure due to a separate portion of exposed line leading to its Tritown delivery point.

The company said in website postings that the lines were exposed due to erosion and scouring caused by heavy flooding in the area.

On Tuesday a Kinder Morgan spokeswoman said there were no reports of damage and the two sections of pipeline remained out of service.

Thomson Reuters Natural Gas Analytics group said data from LCI Energy Insight showed gas pipeline scrapes early on Tuesday pointed to 600 - 800 million cubic feet of production impacted from the shut-ins.

Despite the shutdowns, crude was still flowing through SemGroup's 72,000 barrel per day White Cliffs pipeline, which connects into Cushing, Oklahoma, according to oil industry monitor Genscape.

White Cliffs has two loading points, one at Platteville, Colorado and the other at Healy, Kansas.

SemGroup has been injecting crude into the pipeline from Healy since the beginning of the month as it prepares for an expansion at Platteville, according to Genscape. Flows through the pipeline averaged 66,000 bpd over the week to September 13, Genscape said.

Officials from SemGroup were not immediately available for comment.

(Reporting by Eileen Houlihan, Selam Grebrekidan and Matthew Robinson; Editing by Gerald E. McCormick and James Dalgleish)