WRAPUP 2-Fire at Mississippi gas plant halts two U.S. Gulf Coast platforms

Tue Jun 28, 2016 5:02pm EDT
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(Adds details on affected companies and offshore platforms, oil and gas prices)

By Catherine Ngai and Liz Hampton

CALGARY, Alberta/HOUSTON, June 28 (Reuters) - At least two offshore oil platforms halted operations on Tuesday in the U.S. Gulf of Mexico after a fire at a natural gas processing plant in Mississippi shut a crucial pipeline that brings output onshore, several companies said.

The fire at the Enterprise Products Partners LP plant in Pascagoula was brought under control, but officials were forced to close the 225-mile (362 km) Destin gas pipeline system that can carry 1.2 billion cubic feet per day from offshore fields to Pascagoula.

There were no injuries from the blaze, Enterprise said, adding the cause was under investigation. Enterprise took ownership of the plant from BP Plc on June 1.

Destin, majority-owned by BP with Enbridge Inc a minority partner, said it was declaring force majeure, a legal clause that allows it to scrap commitments, as a result of the fire.

By Tuesday afternoon, the plant had not yet resumed operations. In a notice, Destin said that Enterprise had not yet indicated a timeline for the restart, and was looking at offering shippers options for alternate offshore transportation.

Southern Green Canyon crude WTC-SGC, an offshore, medium grade delivered into Nederland, Texas, traded at $3.25 a barrel discount to the U.S. crude benchmark on Tuesday compared with a midpoint of $3.80 below WTI on supply concerns.

Destin's pipeline is connected to over 10 oil and gas platforms with capacity to produce hundreds of thousands of barrels of oil and millions of cubic feet of gas a day.   Continued...