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Williams Gas Explosion Cuts Pipe Flows as Town Evacuated

Williams Cos. halted natural gas supplies to interstate pipelines from its Opal plant in Wyoming, a major processing point and pricing hub for the fuel in the western U.S., after an explosion that triggered a town-wide evacuation. Prices rose in New York.

Natural gas gathering from surrounding areas stopped after the blast, which occurred at about 2 p.m. local time yesterday, Williams said in a statement. No injuries were reported and an investigation into the cause of the incident will start when it’s safe to return to the plant, which was recently processing about 1 billion cubic feet a day of gas, according to the company. Opal, a town of fewer than 100 residents, was evacuated as a precaution, a county official said.

The outage threatens to trap supplies from the Rocky Mountains at the Opal hub, where interstate pipelines operated by Williams, Questar Corp. (STR), Kern River Gas Transmission Co. and Colorado Interstate Gas Co. LLC collect fuel. A prolonged disruption may boost spot prices at other supply centers for the western U.S., including the Waha Hub in Texas.

“We might see a few-cents blip on gas at the Henry Hub” in Louisiana, the delivery point for futures traded on the New York Mercantile Exchange, said James Williams, president of WTRG Economics, an energy consultant in London, Arkansas. “Gas out of West Texas should also get a little bump for a while until this is resolved.”

Natural gas for May delivery rose as much as 6.7 cents, or 1.4 percent, to $4.783 per million British thermal units in electronic trading on Nymex today. Spot prices at Opal rose 6 cents to $4.6288 per million Btu yesterday, while Waha supplies gained 5 cents to $4.67, data compiled by Bloomberg show.

Opal Evacuation

The explosion affected cryogenic processing unit TXP-3, one of five at the facility, which has a maximum capacity of 1.5 billion cubic feet a day, the company said in the statement. Opal was evacuated in case the fire at the complex spread and created a smoke plume, Stephen Malik, a Lincoln County spokesman based in Afton, Wyoming, said by telephone yesterday.

Kern River notified shippers yesterday that Williams had cut volumes and would reduce flows to zero. The line operator extended its nomination deadline to allow its customers time to find replacement supplies.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net Ramsey Al-Rikabi, Alexander Kwiatkowski

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