TransCanada Says Keystone Resumes Shipping Crude Oil
Author: Erwin Seba
TransCanada Corp's 591,000 barrel-per-day (bpd) capacity Keystone pipeline resumed shipping crude oil, one week after being shut by a leak at a Kansas pumping station, the Calgary-based company said in a statement.
The restart comes a day after the U.S. Pipeline and Hazardous Materials Safety Administration said TransCanada could restart the Keystone by meeting a series of safety requirements to prevent leaks that idled the key export line for Canadian crude twice in May.
Oil prices rose 2 percent to three-week highs soon after the May 29 outage as it limited oil shipments from Canada, the largest crude supplier to the United States. Canadian cash oil prices weakened as supplies backed up in Alberta.
U.S. crude oil futures were trading 15 cents lower at $100.07 a barrel following the restart.
The pipeline leaks gave fodder to opponents of a proposed $7 billion expansion of the Keystone system, which would carry crude derived from Canada's oil sands as far as the U.S. Gulf Coast.
TransCanada is awaiting approval from the U.S. State Department for the expansion.
On Sunday, TransCanada's chief executive said the pipeline was sound despite the leaks.
"Almost all of the oil releases over the last 11 months on Keystone have been minor - averaging just five to 10 gallons of oil," said TransCanada Chief Executive Russ Girling. "The vast majority of that oil was confined to our property and in all cases was cleaned up quickly. None of the incidents involved the pipe in the ground - the integrity of Keystone is sound."
The line was pumping about 480,000 bpd of crude when a half-inch fitting failed on May 29 at the Severance pumping station in Kansas. A total of 10 barrels of oil was released. The spill was confined to TransCanada's property.
In early May, Keystone was shut down for nearly a week after a 500-barrel spill at a pump station in North Dakota, which TransCanada blamed on a different piece of equipment.
In its corrective action order, PHMSA revealed a leak in South Dakota on May 25, but said it was below the threshold for reporting it.
With immediate repairs completed, PHMSA had said TransCanada must perform metallurgical testing, analysis of the failures and review other parts of the year-old system.
(Editing by Himani Sarkar and Randi Fabi)