Keystone pipeline closed due to 14,000-barrel oil spill in Kansas

Keystone pipeline closed due to 14,000-barrel oil spill in Kansas
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December 8 (Reuters) – Canada’s TC Energy shut down the US Keystone pipeline after more than 14,000 barrels of crude spilled into a creek in Kansas, making it one of the largest crude spills in the US in nearly a decade.

The cause of the spill, which occurred in Kansas, about 20 miles south of a major intersection in Steele City, Nebraska, is unknown. This is the third time several thousand barrels of crude has spilled since the pipeline first opened in 2010.

With a capacity of 622,000 barrels per day, the Keystone line is a critical artery that carries heavy Canadian crude from Alberta to refineries in the US Midwest and Gulf Coast. It’s unclear how long the shutdown will take.

The U.S. Environmental Protection Agency said in a statement that Mill Creek had no impact on drinking water wells or the public, although surface waters were affected. He sent two coordinators to the site to oversee TC Energy’s response and assess the cause of the leak.

Keystone shut down the line around 8pm CT Wednesday (0200 GMT Thursday) after alarms sounded and system pressure dropped, TC (TRP.TO) said one release. He said booms were used to contain the leak.

“The system remains down as our crews actively respond and work to contain and recover the oil,” the statement said.

According to data from the U.S. Pipeline and Hazardous Material Safety Administration (PHMSA), this will be the largest crude oil spill since it leaked more than 20,000 barrels of oil from a Tesoro pipeline in North Dakota in October 2013.

PHMSA is also investigating the spill, which occurred near Washington, Kansas, a town of about 1,000.

According to PHMSA data, there have been seven Keystone leaks since it became operational in June 2010. The largest, according to PHMSA figures, was in December 2017, when more than 6,600 barrels were spilled in South Dakota, and more than 4,500 in North Dakota in November 2019.

TC declared force majeure due to the interruption, which referred to unexpected external conditions that prevented a contracting party from fulfilling its obligations, according to a source with direct knowledge. TC did not respond to a request for comment.

The two Keystone shippers said TC had not yet informed them how long the pipeline could remain closed.

The closure of Keystone will prevent deliveries of Canadian crude to both the US storage center in Cushing, Oklahoma, and the Gulf, where it is processed or exported by refineries.

The shutdown is expected to increase the discount for Western Canada Selected (WCS) heavy oil to US crude from Alberta, which is already high due to sluggish demand for heavy, sour Canadian oil.

WCS for December delivery traded at $33.50 per barrel of WTI, a bigger discount than Wednesday’s $27.50 per barrel settlement, according to one broker.

“It’s a really worst-case scenario if this shutdown lasts long,” said Rory Johnston, founder of the energy newsletter Commodity Context, noting that if the price drops further, shippers may choose to ship crude by rail.

BMO analyst Randy Ollenberger said the Hardisty, Alberta headquarters had enough storage until the pipeline was back online.

Steele City is roughly the junction where Keystone splits, where one section carries crude oil to Illinois refineries and the other transports oil south to Oklahoma and the Gulf Coast.

RBC analyst Robert Kwan said in a note that if the leak was located south of the intersection, TC could quickly restart the section to Illinois.

Kwan said that while past shutdowns usually lasted about two weeks, it could take longer because it involved a body of water.

announced that he will be on November 15, TC reduce volumes in the pipeline due to some severe weather event, without specifying the size or duration of the curbs.

TC shares closed 0.1% lower in Toronto.

Reporting by Arpan Varghese, Brijesh Patel and Deep Vakil from Bengaluru, Rod Nickel, Nia Williams and Arathy Somasekhar; Editing: Alexander Smith, Andrea Ricci and Josie Kao

Our standards: Thomson Reuters Trust Principles.

Type Nickel

Thomson Reuters

It covers energy, agriculture and politics in Western Canada, where the energy transition is a key area of ​​focus. She has covered short-term coverage in Afghanistan, Pakistan, France, and Brazil, and covered the campaign trails of political leaders during two election campaigns in Canada, with Hurricane Michael in Florida, Tropical Storm Nate in New Orleans, and the 2016 Alberta wildfires.

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