Gas prices to jump in Nanaimo area following pipeline explosion

Gas prices to jump in Nanaimo area following pipeline explosion
Pipeline explosion near Prince George leads to high gas prices in the Capital Region
Drivers across the Greater Victoria area are feeling the pinch of high fuel costs after a natural gas pipeline exploded near Prince George on Tuesday.

The price of regular gasoline at many stations through the Capital Region was at 153.9 cents per litre on Thursday, the highest levels in the area since earlier in the summer. It was also an increase of nearly 15 cents per litre from the day before.

And Dan McTeague, senior petroleum analyst with GasBuddy, said prices could climb even more in the next few days as three out of four Washington State refineries have indicated they will have to reduce output until the pipeline is fixed.

Analysts say about 10 per cent of Western Canada’s daily natural gas output was stranded when Enbridge Inc. halted transport on the 36-inch line that exploded Tuesday as well as its neighbouring 30-inch line.

“All refineries run on natural gas to create steam, to create energy, to turn oil into gasoline,” McTeague said.

1 of 2 pipelines back on after gas line explosion near Prince George, B.C.

“When they run into trouble, it’s clear that unless prices rise to attract vessels from other parts of the world, you’re going to end up with no supply or pretty dramatic increases in the price of gasoline.”

Vancouver gas prices to hit record high this weekend

More than 1.6 billion cubic feet per day – roughly 10 per cent of Western Canada’s daily natural gas output – was stranded when Enbridge Inc. halted transport on the 36-inch line that exploded near Prince George, B.C and on its neighbouring 30-inch line.

The National Energy Board allowed Enbridge to restart the smaller line at a lower pressure, but analysts say that still leaves between 600 million and 800 million cubic feet per day of gas without an easy path to market.

A bright, orange fireball from the explosion could be seen for kilometres and homes within the vicinity were evacuated as a precaution. Residents, who said the explosion sounded like thunder, were allowed to return about two hours later.

“There are not a lot of other routes for gas to reach Vancouver or for export,” said Ian Archer, associate director for IHS Markit, pointing out about one billion cf/d of the normal daily payload is headed for export into Washington.

“Without it, their output is curtailed,” he added. “That has caused a 30-cent-a-gallon increase in PNW market gas prices, which in turn is leading to a 4 cent/litre hike at the pumps for Vancouver drivers tomorrow.”

“It was the mainline that went out. So I would assume this is Enbridge’s absolute No. 1 priority to get fixed.”

“That could put us on course to gas prices going to 161.9 cents/litre tomorrow and then up another two cents to 163.9,” he noted.”That would be a record price. ”

Some Natural Gas Flowing Again

Prices at the main interior B.C. trading hub have crashed to about $1 per thousand cubic feet from around $2.60 before the incident, said commodity analyst Martin King of GMP FirstEnergy.

“For those that can get gas out, prices at Station 2 have come down quite a bit because the line break is south of the trading point,” said King, adding producers who can’t get their gas out will have to shut down their wells.

Two Enbridge pipelines – a 36-inch line and a 30-inch line – were shut down in the wake of Tuesdays explosion. FortisBC said the pair supply about 85 per cent of the provinces natural gas, creating serious concerns about a shortage that could leave hundreds of thousands of people without service.

Some B.C. gas is being redirected into Alberta markets, Archer said, causing prices there to slip from around $2.50 per gigajoule (an energy unit that’s similar in size to 1,000 cubic feet) to just over $2.

“After reviewing known information by all stakeholders, there are no indications that the explosion was criminal in nature,” RCMP said Thursday.

The analysts say they expect Enbridge will restore the pipeline to service within a week or two, given the lack of damage to the parallel line and the high priority of restoring gas to residential markets in B.C. at the beginning of winter.

“The investigation has now been turned over to Transportation Safety Board, with assistance from National Energy Board and Enbridge.”

Alberta and B.C. gas prices had jumped in recent weeks thanks to more demand because of unusually cold weather in Alberta.

Puget Sound Energy and Cascade Natural Gas, both U.S. energy companies, are also asking customers in Washington state to help conserve natural gas and electricity because of B.C.'s pipeline rupture and the impact it has on the U.S. gas supply. 

B.C. pipeline explosion strands natural gas output, cuts into wellhead prices

NANAIMO — An industry insider is warning Vancouver Island motorists to expect an increase in gasoline prices of at least eight-cents a litre by Saturday.

UBC issues alert about potential natural gas shortage

Gasbuddy.com senior petroleum analyst Dan McTeague said the pending increase is linked to the natural gas pipeline explosion near Prince George.

Service will now begin to be restored to about 128 customers in Salmon Valley who lost their gas after the line was shut down after the blast.  Those customers will have to wait for a Fortis BC representative to come to their home or business to turn gas back on at the meter and relight all affected appliances.

Its likely youre going to see prices break into record territories and much of it to do with the fact that refineries (in Washington State) cannot operate efficiently or effectively without their primary source of heat, which is natural gas.

PRINCE GEORGE – Gas is flowing through a 30 inch Enbridge pipeline once again.  The line was shut down as a precaution after the explosion and fire Tuesday night on its twinned 36 inch line near the city of Prince George.

McTeague said gas prices on Vancouver Island will likely remain inflated for a week or two until the damaged pipeline is repaired.

RCMP Rule Out Criminal Activity After Pipeline Explosion

Most gas prices at stations in the Nanaimo area were $1.45 a litre as of early Thursday afternoon, according to GasBuddy.com.