Bloomberg News

Williams Probe Expanded on ‘Unusual’ Gas Accidents Trio

May 15, 2014

Wyoming Plant Explosion

Officials at the site of an explosion and fire at a natural gas processing facility and major national pipeline hub, on April 23, 2014, in Opal, Wyo. Officials said there are no reports of injuries and the residents of Opal have been evacuated to an area about 3 miles outside the town as a precaution. Opal has about 95 residents and is about 100 miles northeast of Salt Lake City. Photographer: Rachel Anderson/AP Photo

A probe into safety practices at pipeline operator Williams Cos. (WMB:US) is being expanded after a natural gas plant fire led to the evacuation of a town in Wyoming last month, the company’s third accident in a year.

While it’s unclear if there are any broader issues, the string of incidents is “unusual” said Dan Tillema, a lead investigator at the U.S. Chemical Safety Board, in an interview yesterday. “With a strong corporate oversight of process safety, it would be very unlikely to have three incidents like this in a 12-month period.”

Williams, operator of more than 26,000 miles (42,000 kilometers) of oil and gas pipelines, announced its own safety review this month, after an April 23 fire at a natural gas plant forced the evacuation of nearby Opal, Wyoming. That followed a March 31 explosion at a liquefied gas storage site in Plymouth, Washington, and a June 2013 blast at a Louisiana chemical plant that killed two workers and left 80 injured.

The safety board was already investigating the Geismar, Louisiana, explosion. After the more recent incidents, “we’re going to look at whether or not there’s a higher-level corporate issue,” Tillema said.

The Washington, D.C.-based board has no power to impose penalties and instead makes recommendations to companies and industries to avoid future problems.

In December, the U.S. Occupational Safety and Health Administration cited Williams for six safety violations at the Geismar plant and proposed a $99,000 fine.

The Tulsa, Oklahoma-based company is still in discussions with the agency, a spokesman, Tom Droege, said in an e-mail. Williams is cooperating with the safety board and other oversight agencies, he said.

CEO Speaks

The company and its Williams Partners LP (WPZ:US) affiliate, which owns the Geismar plant, will hire outside experts to provide an independent look at their practices as part of the internal probe, Chief Executive Officer Alan Armstrong said in a May 13 interview in New York. The review will look at on-the-ground performance, resources provided for safety and maintenance and the “culture” established across Williams, Armstrong said.

“It’s been a pretty painful year, frankly, to have a number of incidents occur like this,” he said. “And I would just tell you we are going to be very, very diligent about making sure we understand if there are any common, root causes.”

Williams overall has a “very good” safety record, Armstrong said, citing federal pipeline safety statistics.

Maintenance Spending

Capital spending on maintenance by Williams Partners has declined in recent years even as its pipeline network expanded, according to company filings (WPZ:US). Armstrong, who is also CEO at the partnership, said expenses have fallen because upgrades were completed on the most vulnerable parts of the system. Inspection rates haven’t decreased, he said.

Tillema, the safety board investigator, said Williams has cooperated with the government’s investigation. “They want to understand what happened as much as we do.”

Williams rose 0.4 percent to $45.45 at the close in New York. Williams Partners slipped 0.8 percent to $52.20.

To contact the reporter on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net

To contact the editors responsible for this story: Susan Warren at susanwarren@bloomberg.net Carlos Caminada, Stephen Cunningham


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Companies Mentioned

  • WMB
    (Williams Cos Inc/The)
    • $56.42 USD
    • -0.08
    • -0.14%
  • WPZ
    (Williams Partners LP)
    • $54.25 USD
    • 0.31
    • 0.57%
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