trending Market Intelligence /marketintelligence/en/news-insights/trending/917hwpz8-hi0cnvfk7davq2 content esgSubNav
In This List

Gas supply little affected by January pipe explosion in Ohio

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Using ESG Analysis to Support a Sustainable Future

Research

US utility commissioners: Who they are and how they impact regulation

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?


Gas supply little affected by January pipe explosion in Ohio

A late January explosion on a 24-inch gas pipeline in Ohio does not appear to have had a significant impact on gas movement in the region, according to an analysis of S&P Global Market Intelligence data.

Tallgrass Energy Partners LP's Seneca Lateral off the Rockies Express Pipeline LLC, or REX, system exploded and caused a fire in the early hours of Jan. 31. The company shut in the line but said at the time that customers were using other parts of the gas system for their supplies, so consumer impact was expected to be minimal.

A recent contract change appears to support that expectation.

SNL Image

REX's Seneca Lateral brings gas near a MarkWest Energy Partners LP processing facility. In recent months, the primary shipper with firm capacity contracted on REX's Seneca Lateral has been Antero Resources Corp., according to S&P Global Market Intelligence's first-quarter Index of Customers data. But as of Jan. 2, Energy Transfer Partners LP's Rover Pipeline LLC — which operates a 42-inch pipe that is also called the Seneca Lateral — signed a firm transportation contract with Antero. That agreement included deliveries to a point associated with the MarkWest processing facility.

By Jan. 19, shipments on REX's Seneca Lateral had tapered off to zero, while gas movement on the Rover Seneca Lateral was on the rise.

In response to the Jan. 31 incident, MarkWest's Seneca gas processing plant shutdown temporarily as a safety precaution, according to a company spokesman. Shipments on the Rover Seneca Lateral dropped accordingly but have since resumed, S&P Global Market Intelligence data showed.

SNL Image

The contract Antero signed with Rover appears to be a lower-cost option than the one with REX, the data showed. Antero's contract with REX has a maximum rate of roughly $26.67/Dth per month in reservation fees, whereas Rover agreed to charge about $14.96/Dth per month — a rate that falls even below the typical maximum tariff rate of roughly $15.55/Dth per month, according to transactional reporting data.

REX's Seneca Lateral, a steel pipeline that went into service in 2014, ruptured at about 2:30 a.m. ET on Jan. 31 in a rural area in Noble County, Ohio. The incident resulted in no injuries or evacuations, and the company and the county Emergency Management Agency worked with regulators in the aftermath. Tallgrass said it was still investigating the cause.

SNL Image