Ethane leaking at a big natural gas liquids plant in Alberta burned out of control ...
Ethane leaking at a big natural gas liquids plant in Alberta burned out of control for the third day on Tuesday as the province's huge gas market felt the effects in the form of a jump in wholesale prices.
Ethane, a gas byproduct used to make plastics, ignited on Sunday in an explosion at the plant near Edmonton, Alberta, owned by BP Plc (quote from Yahoo! UK & Ireland: BP.L). The blast caused no injuries, but ethane leaking from two wellheads continued to burn as the company sprayed large volumes of water on it.
A spokesman with BP Canada Energy said there was no indication yet how long the fire would burn.
An underground storage cavern at the site, 6 km (4 miles) northeast of Fort Saskatchewan, Alberta, contains about 480,000 barrels of ethane, which is stripped from the gas.
The Alberta Energy and Utilities Board (EUB) said on Tuesday the fire was affecting other petroleum operations in the province, including natural gas production as well as petrochemical manufacturing.
That was echoed by gas traders, who said wholesale prices in Alberta -- Canada's main producing province -- jumped by about 4 percent from Monday, even though most North American prices fell.
Spot gas at the AECO storage hub, a key trading center in southeastern Alberta, rose about 13 Canadian cents to C$3.33 per gigajoule ($2.33 per million British thermal units). That compared with a drop of nearly 13 cents to a new 18-month low of $2.42 per million British thermal units on the New York Mercantile Exchange.
The shutdown of the facility has forced producers of gas that is rich in such liquids as ethane, propane and butane to shut down some wells, cutting the volume of gas they offer into the market, as well as buy spot supplies to meet commitments, traders said.
One Calgary-based gas marketer estimated the cut in production volumes to be as high as 400 million cubic feet a day, or roughly 3 percent of Alberta's daily supply.
The EUB said it was reviewing options along with the industry and other government agencies to reduce the impact of the incident.
Some include allowing natural gas plants that ship to the BP plant to flare gas liquids, relaxing pipeline specifications to allow more liquids into major pipelines, and curtailing supplies to petrochemical plants.
Meanwhile, BP said that over the past 24 hours it had boosted the amount of water it was spraying on the fire. It has said that the smoke is not toxic.
``Due to the oxygen content in the water, a cleaner burn has been achieved from the wellheads, meaning a substantial decrease in the smoke and particulates from the fire,'' BP Canada operations manager Neal Spencer said in a statement.
The company said it was able to view the wellheads for the first time early on Tuesday, and can better determine what it should do to stop the inferno.
``Now they are doing some hazardous operation review, looking at the various alternatives that there might be there, as well as trying to get a better idea of what the flow is,'' BP Canada spokesman Phil Cochrane said. ``Once those processes are done, we'll be able to answer (questions such as) 'How long, and what is your plan of action.'''
($1 equals $1.54 Canadian)