Keystone Oil Pipeline Partly Shut To Investigate Possible Leak

Cornelia Mascio
Febbraio 10, 2019

Canadian crude weakened after two critical oil pipelines remained partially shut amid an investigation into a possible leak in Missouri.

TransCanada shut down the pipeline on Wednesday between Steele City, Neb., and Patoka, Ill., and dispatched crews to assess the situation, company spokesperson Terry Cunha said in an email.

The 590,000 barrels-per-day Keystone pipeline is a critical artery taking Canadian crude from northern Alberta to US refineries.

Yet, the pipeline routes for Canadian oil to the USA are full to capacity and rising production in Canada previous year led to further takeaway capacity constraints that forced Alberta to mandate an oil production cut of 325,000 bpd for three months starting January 2019.

According to data from Net Energy Exchange quoted by Reuters, the discount of Western Canadian Select (WCS)-the benchmark price of oil from Canada's oil sands-to WTI widened on Thursday morning to US$10.15 a barrel from US$9.40 a barrel earlier.

Keystone runs parallel to Enbridge's Platte line and feeds refineries owned by BP Plc, Marathon Petroleum Corp and one jointly by Phillips 66 and Cenovus Energy.

Enbridge restored service on a segment of the Platte pipeline running between Casper, Wyoming and Salisbury, Missouri, yet the remainder of the line downstream of Salisbury remains shut, according to Devin Hotzel, an Enbridge spokesman, on Thursday.

A St. Charles County spokeswoman said there did not appear to be any evacuations since the area near the leak is not heavily populated.

The disruption comes as refiners seek alternative supplies of heavy crude on the U.S. Gulf Coast after sanctions on Venezuela effectively cut access to the country's oil.

About 43 barrels of crude spilled near the Mississippi River, Brian Quinn, spokesman for the Missouri Department of Natural Resources, said in an email.

The discount on Canadian heavy crude compared with USA light oil grew to as much as US$11.50 per barrel on Friday from the previous day's settlement of US$10.25, according to Net Energy Exchange, indicating concerns about oil reaching buyers.

Marathon declined to comment and BP did not respond to a request for comment.

TransCanada shares eased 0.2 percent to C$55.98 in Toronto.

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