Infrastructure / Canada / Shale Daily / NGI All News Access

Keystone Deliveries Resume as Leak Investigation Continues

Flows resume Monday into the United States from Alberta on the Keystone oil pipeline after an 11-day interruption to repair a leak and start cleaning up a 5,000 bbl oil spill in northeastern South Dakota.

Deliveries were beginning through a “controlled return” at reduced pressure and gradually pumping back up to the seven-year-old line’s capacity for 530,000 b/d, operator TransCanada Corp. said Monday.

The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) reviewed the restart plan and made no objections, TransCanada noted. No air or water pollution concerns have been raised in the spill area by state authorities or landowners.

Neither TransCanada nor the PHMSA disclosed a suspected cause for the leak. The rupture was under pancake-flat and thinly populated South Dakota farmland near Amherst, a region not noted for threats to pipelines such as frequent floods, high flows in river or stream crossings, earth tremors or slope erosion. A brief flash flood damaged a cattle feedlot in 2009, before Keystone began operating.

As of last weekend about 170 cleanup and remediation personnel recovered 44,730 gallons of oil, or one-fifth of the spill of 210,000 U.S. gallons (reported more dramatically in Canada as 795,000 liters, using the national metric system).

TransCanada did not disclose cleanup cost or completion date estimates. Officials of the South Dakota Public Utilities Commission said Keystone’s performance is watched closely and its operating liable is liable to be suspended or cancelled if violations are discovered.

Canadian industry analysts rated the high-volume traffic disruption as a contributor to recent oil price increases, along with optimism that the Organization of the Petroleum Exporting Countries will extend restricted production quotas at a meeting this week.

TransCanada, meanwhile, gave no further hint at the fate of the proposed Keystone XL 830,000 b/d addition to the oil export network.

As part of a cost and shipper lineup review the company requested clarification of a route approval order granted by the Nebraska Public Service Commission on Nov. 20, four days after the leak in the completed first Keystone line revived environmental and native protest against a system that primarily carries Alberta oilsands production.

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