NGL prices rise following Louisiana pipeline explosion/fire

(Adds update on state government investigation, fire conditions)

HOUSTON (ICIS)–The cause of a Thursday night explosion and ongoing fire at a natural gas liquids (NGL) pipeline station run by Phillips 66 in southeast Louisiana remains under investigation, company and state government officials said in a Friday press conference.

The high-velocity NGL pipeline spans 95 miles (153 km) from where the incident occurred at Paradis, Louisiana near New Orleans, to the southeast tip of Louisiana, Phillips 66 said. It transports raw, Y-grade NGLs, which are a mix of ethane, propane, butane and natural gasoline that has yet to undergo separation. The line was carrying at least propane gas at the time, officials said.

Ethane prices jumped in Friday morning trading following news of the fire and pipeline block-in and were assessed by ICIS at 26.25 cents/gal, up by 2.9% from 25.50 cents/gal late Thursday. Propane rose by 1.8% on Friday morning, moving to 82.75 cents/gal from 81.25 cents/gal the afternoon before. N-butane rose by 3.5% to 126.5 cents/gal from 122.25 cents/gal, while natural gasoline climbed 4.6% to 119 cents/gal from 113.75 cents/gal.

Routine maintenance was in progress when the incident occurred, officials said, with three Phillips 66 employees and three contact workers using cleaning “pigs” on the line just before the explosion. “Pigging” refers to the practice of using devices to perform maintenance and cleaning without stopping the flow of product in the pipeline.

An explosion occurred, with fire then erupting from the line, which according to local media was at least 40 feet (12 metres) high at its peak.

The fire has since died down but the line is still blocked and product continues to burn, the company said.

According to the company on Friday, one Phillips 66 employee remains unaccounted for and one contract worker is still hospitalised.

Emergency and government crews evacuated the area Thursday but according to local government information, the evacuees have been allowed to return. Air monitoring equipment shows no measurable health impact as of yet, Phillips 66 said.