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The Keystone pipeline, shown here under construction
The Keystone pipeline, shown here under construction

TransCanada restarts Keystone oil pipeline Add to ...

TransCanada Corp. said on Monday it had restarted its major oil pipeline to the central United States from Canada following a five-day outage to check for a potential defect on the line in the U.S. Midwest.

TransCanada, the country’s largest pipeline company, said it would operate the 590,000 barrel-a-day Keystone pipeline at reduced rates for up to 24 hours while it completes its testing.

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The outage of the line, which extends to southern Illinois, and the Cushing, Okla., storage hub from Hardisty, Alta., will affect scheduled shipments for this month, though the extent is not yet known, spokesman James Millar said in an email.

“We will be having direct discussions with our customers regarding the impact this will have on their deliveries to us,” Mr. Millar said.

The line, which can move up to a quarter of Canada’s crude exports to the United States, will return to regular contractual deliveries in November, he said.

The unplanned shutdown pushed up oil prices last week, but they have since fallen back. November crude on the New York Mercantile Exchange sank $1.32 (U.S.) to $88.73 a barrel on Monday on economic worries and expectations that Keystone would restart.

TransCanada shut the pipeline late Wednesday when an in-line inspection tool detected what the company called a “small anomaly” on the pipe.

It did not give the location, but the U.S. Pipelines and Hazardous Materials Safety Administration said it had sent an inspector to observe repairs on a section between Missouri and Illinois.

The pipeline is the first phase of TransCanada’s overall Keystone system and has been in operation since 2010.

The next phase, between Cushing and Gulf Coast refineries, is under construction amid opposition from some landowners. The contentious Keystone XL project, between Alberta and southern Nebraska, still requires U.S. federal approval after U.S. President Barack Obama rejected the initial application early this year.

TransCanada has re-applied to build that $5.3-billion portion of the system, hoping for an approval early next year.

 

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