CALGARY – A natural gas pipeline that extends from northeastern British Columbia to the Chicago area has been shut while its operator disposes of dangerous hydrogen sulphide gas that got into the system.
Alliance Pipeline said it expects its mainline to be closed for an “indeterminate amount of time” as it deals with the gas, which is poisonous, corrosive, flammable and smells like rotten eggs. The company did not say how much of it entered the pipeline, only that the amount exceeded its standards.
“Our chief concern now is to ensure the safety of the public, employees and the environment,” vice-president Daniel Sutherland in a news release late Thursday.
“We apologize for any inconvenience this may cause to our customers and we are working with our partners and the regulator to determine the cause.”
Alliance plans to burn off the gas at its Alameda compressor station about 250 kilometres southeast of Regina and at a block valve 24 kilometres northwest of the station, said Tony Straquadine, manager of commercial and government affairs.
Detectors along the pipeline alerted Alliance to the fact that hydrogen sulphide levels were too high and the pipeline was shut on Friday morning.
Alliance said the incident was the result of “complications experienced by an upstream operator,” but did not identify the company involved.
However, natural gas processor and transporter Keyera Corp. (TSX:KEY) said there was a “brief operational upset” at its Simonette gas plant in northwestern Alberta on Wednesday. As a result, gas “which did not meet sales gas specifications” entered the Alliance system. It said there was no risk to the public or to the environment.
“We have offered our assistance to Alliance Pipeline and are working with our producer customers to divert gas and find alternative solutions for their production until regular operations resume on Alliance,” Keyera said.
Alliance has told its customers to expect the line to be out of commission for at least the weekend and it will provide updates as they come available, said Straquadine.
The company has not had to deal with an event like this in its more than 14-year history, he added.
The Alliance Pipeline is jointly owned by an affiliate of pipeline giant Enbridge (TSX:ENB) (TSX:ENF) and Calgary-based Veresen (TSX:VSN). It runs 3,848 kilometres and carries 1.6 billion cubic feet of natural gas a day.
AltaCorp Capital analyst Dirk Lever said the outage is a “pain in the neck” for producers, but the consequences shouldn’t be too dire. He expects the line to be out of service for days, rather than weeks.
“The indications are it’s more of a nuisance. Most guys have got interruption insurance, so that may kick in,” he said, adding Alliance is being cautious by burning off the hazardous gas in a controlled setting.
“Nobody’s happy that this is happening at a low commodity price environment. These things are expensive no matter how you look at it.”
So far, Seven Generations Energy (TSX:VII), NuVista Energy (TSX:NVA), RMP Energy (TSX:RMP), Crew Energy (TSX:CR) and Cequence Energy (TSX:CQE) have suspended production as a result of the Alliance outage.
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