An explosion on June 7 near Moundsville, West Virginia, on the Leach XPress pipeline cut off an estimated 1.3 billion cubic feet per day (Bcf/d) of natural gas transportation capacity out of the Marcellus region. The cause of the explosion is currently under investigation by the Pipeline and Hazardous Material Safety Administration. Following the incident, Columbia Gas Transmission (TCO), which operates the pipeline, issued a critical notice declaring a force majeure and announcing that there would be no flows on the Leach XPress line until further notice. The 160-mile long, 36-inch diameter Leach XPress was placed into service on January 1, 2018.
Although a reduction in pipeline takeaway capacity can affect natural gas production if supply no longer has a means of getting to market, production levels in the Northeast have so far been unaffected. PointLogic Energy estimates that dry production in Pennsylvania, Ohio, and West Virginia was essentially unchanged from June 6 to June 12, averaging a little more than 27 Bcf/d.
As capacity decreased on the TCO system, flows on other pipelines in the region increased, indicating production volumes were re-routed to other pipelines. Data from PointLogic Energy indicate production receipts on the TCO system fell by 1.3 Bcf/d from June 6 to June 8. Over the same period, production receipts on Texas Eastern Pipeline (TETCO), Rockies Express Pipeline, and Rover Pipeline cumulatively rose by 1.2 Bcf/d. Most of this increase, 0.9 Bcf/d, was observed on TETCO, which flows natural gas to both the Gulf Coast and the Philadelphia and New York City areas.
In the days following the event, some regional price changes were observed. Prices at Dominion South in southwestern Pennsylvania fell from $2.36 per million British thermal unit (MMBtu) on June 6 to $2.11/MMBtu on June 8. However, the price has since rebounded to $2.23/MMBtu as of June 12.
