Gas Deliveries Resuming as Cold Descends on British Columbia

(Bloomberg) -- High-rise apartment buildings, factories and other industrial customers in western Canada are receiving natural gas again, three days after an Enbridge Inc. pipeline explosion disrupted deliveries.

Fortis Inc. is bringing industrial customers in British Columbia back onto the fuel distribution system at reduced rates, the utility said in an emailed statement late Thursday. The restoration process will continue through the weekend. The resumption comes as overnight temperatures are set to drop below freezing in Kamloops and other cities in Fortis’ territory in Canada’s westernmost province.

An explosion Tuesday on an Enbridge pipeline outside the remote town of Prince George cut gas supplies to homes, factories and oil refineries as far away as Oregon. While investigations continue into what caused the 36-inch (91-centimeter) conduit to rupture, Enbridge is shipping gas through a smaller, adjacent pipe that was temporarily shut after the blast. Fortis’s regional utility said it was receiving about 40 percent of its normal gas volumes.

Market Impact

  • Wholesale gasoline in Portland, Oregon, fell 7.5 cents to 47.5 cents a gallon over New York-traded futures contracts on Friday, a day after touching a 5-year high.
  • San Francisco prices dropped half of a cent after climbing to the highest premium in more than a year on Thursday. 
  • Heavy Canadian crude traded at a $48.50 discount to the U.S. benchmark, after hitting a record a day earlier. 
  • Natural gas at Alberta’s pricing hub climbed 11 percent on Thursday, after plummeting 22 percent the day before. 

At least four oil refineries were impacted by disrupted gas deliveries. Those units rely on the fuel to generate power and heat needed to process fuel.

Marathon Petroleum Corp.’s and Royal Dutch Shell Plc’s Washington complexes were operating at scaled-back rates as of Friday afternoon. BP Plc was processing crude at its Cherry Point refinery although some key equipment was working at a reduced pace. Meanwhile, Phillips 66 was in the process of ramping operations back to normal at its Ferndale, Washington, refinery.

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