CALGARY – Heavy rain and severe flooding have knocked out multiple pipelines delivering oil and gas to Canada’s West Coast, especially the city of Vancouver.
“Due to heavy rainfall and increasing river flows, we shut down a segment of 30-inch natural gas pipeline in the Coquihalla river valley on the morning of Nov. 16 as a precautionary measure,” Enbridge Inc. spokesperson Jesse Semko said in an email to the Financial Post on Tuesday.
The 30-inch gas pipeline is one of two that make up the company’s Westcoast Pipeline system, which delivers up to 1.8 billion cubic feet of natural gas per day from B.C.’s interior to the Vancouver region. The second pipeline in the system, a 36-inch gas pipeline, is still in operation.
“With this segment of the 30-inch natural gas pipeline temporarily shut down, we expect to be able to transport about 1.4 bcfd of natural gas,” Semko said, adding the company is “working with our customers to mitigate potential impacts.”
Extreme rainfall has caused heavy flooding in Fraser Valley, causing the evacuation of the entire 7,000-person city of Merritt, knocking out rail lines and bridges along the Coquihalla highway, which connects Canada’s third-largest city to the rest of the country.
As rivers have swollen, houses have flooded and people are trapped on the highways, the two pipeline systems delivering oil and gas to the region have been interrupted.
“As a precaution, Trans Mountain has shut down the Trans Mountain pipeline due to widespread flooding and debris flows in the area around Hope, B.C.,” a Trans Mountain spokesperson confirmed to Reuters in an email on Monday.
The Trans Mountain pipeline delivers 300,000 barrels of oil per day from Alberta to the Vancouver region. Work on a 590,000-bpd expansion project has also been halted as a result of the flooding.
The company did not respond to a request for comment on whether the line is still shutdown or if it sustained any damage during the mudslides.
The outage on Enbridge’s Westcoast Pipeline system is expected to have an impact on natural gas commodity prices in Western Canada.
The 30-inch gas pipe is a “key pipeline coming out of northeast B.C.,” said Raymond James analyst Jeremy McCrea, noting that he would expect to see a potential impact on both Station 2 natural gas price benchmark in B.C. and at Alberta’s AECO pricing hub.
He said that upstream natural gas producers that normally send their product to the West Coast, would need to consider shipping their gas eastbound into Alberta for the time being.
“Depending on how long they are going to shut down their pipeline — anything more than a few days or even a week and you can start to see some pricing disconnect,” McCrea said.
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