Louisiana sinkhole roils local natural gas network

Louisiana sinkhole roils local natural gas network by Jeanine Prezioso, Reuters, August 8, 2012, Chicago Tribune
NEW YORK (Reuters) – A sinkhole the size of a football field in southern Louisiana has forced energy companies to halt nearby natural gas pipeline activity and draw down fuel from a local storage cavern. Chevron Corp’s subsidiary Bridgeline Holdings declared force majeure on new injections into its salt dome storage facility near the sinkhole and the town of Napoleonville, through the rest of the year, according to notice to customers posted on its website. Customers were also asked to begin reducing their current storage inventory to 40 percent of each of their currently contracted amount, according to the Bridgeline filing. 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. U.S. September and October futures prices settled lower, while winter months settled higher on Wednesday, and traders said companies could be scrambling to sell supplies while locking in winter gas to meet heating demand. … Sinkholes occur when underground spaces or caverns become so large they can no longer support the land above them, causing a collapse. 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. … “This is very puzzling.” Unexplained bubbles discovered in the region in recent months had been under investigation by state, local, and federal agencies. … 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. The storage sites connect with Acadian Gas Pipeline Company, Gulf South Pipeline Company, and Florida Gas Transmission. Maximum withdrawal was listed as 1.1 bcf per day.

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