Analyst: They are worried about a breach of the salt dome — Chevron emptying billions of cubic feet of gas from cavern after Louisiana gov’t issues warning

Published: August 12th, 2012 at 9:58 pm ET
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Title: Plants adapt to pipeline closures
Source: The Advocate
Author: Ted Griggs
Date: August 12, 2012

[...]

[Louisiana's Office of Conservation] also issued warnings to Chevron Pipeline Co. and Occidental Chemical Co. that the companies might have to close their salt caverns and empty them of the gas stored there.

Chevron has begun doing just that, according to spokesman Gareth Johnstone. Chevron has no reason to believe that its facility, the Bridgeline NS1 storage cavern, is threatened, and there is no indication gas is leaking from the facility, Johnstone said. But Chevron is emptying the cavern as a precaution to ensure everything possible is done to protect the public.

Chevron is not saying how much gas is involved or which customers have been affected, Johnstone said.

However, Reuters has reported [see below] that Chevron may be dumping 4 billion to 5 billion cubic feet of natural gas on the market. The added gas has pushed September and October futures prices lower but could mean higher prices this winter when demand is higher.

[...]

Title: Louisiana sinkhole roils local natural gas network – chicagotribune.com
Source: Reuters
Author: Jeanine Prezioso (Additional reporting by Eileen Houlihan and Edward McAllister in New York; Editing by Leslie Gevirtz)
Date: 5:03 p.m. CDT, August 8, 2012

[...]

Natural gas traders said Chevron’s move to purge the gas could push an additional 4 billion to 5 billion cubic feet of gas on the market.

[...]

“Chevron Pipeline Co has elected to take the step of drawing down the NS1 cavern as a precaution to ensure that we are doing everything possible to protect public safety and the environment,” said Gareth Johnstone, a Chevron spokesman.

[...]

There is no indication that gas is leaking from the facility, Johnstone said, adding there was no evidence that the integrity of the cavern was at risk.

[...]

Chevron has three natural gas salt dome storage caverns in the area with a total capacity to hold 12.7 billion cubic feet of gas, according to the company website.

[...]

“They are worried about the cavern integrity and the slurry breaching the salt dome that they have,” said Genscape senior natural gas analyst Andy Krebs.

[...]

Published: August 12th, 2012 at 9:58 pm ET
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