Keystone Oil Spill Probe Seen Cutting Back Pipeline Flows

Keystone Oil Spill Probe Seen Reducing Again Pipeline Flows

Pipes for the Keystone XL pipeline stacked in a yard close to Oyen, Alberta, Canada. (Jason Franson/Bloomberg Information)

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A U.S. probe into the 13,000-barrel oil spill on TC Vitality’s Keystone pipeline is predicted to chop into crude flows forward of the summer season driving season.

Regulators on March 7 ordered the corporate to cut back working stress alongside the whole Keystone system stretching from Hardisty, Canada, to Cushing, Okla., till additional discover.

The brand new restrictions will doubtless drive the pipeline to curb flows, in keeping with Richard B. Kuprewicz, president for Accufacts Inc., a pipeline regulatory advisor. TC Vitality mentioned in an announcement whereas it expects to satisfy its contractual obligations to ship oil, it received’t have the ability to accommodate spot shipments, which usually make up about 6% of flows. It wasn’t instantly clear how or if flows on the connecting Marketlink pipeline could be affected.

The brand new order steps up working restrictions imposed on the pipeline following a 13,000-barrel oil spill in Kansas in December. Keystone had not too long ago returned working charges to pre-shutdown ranges, with flows averaging 594,000 every day barrels to date in March, in keeping with Genscape knowledge seen by Bloomberg.

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The pipeline, which might transfer as a lot as 640,000 barrels a day of heavy Canadian crude to the Gulf Coast, now faces a discount in provides simply as U.S. refiners are ramping up forward of summer season, when yearly gasoline demand tends to peak. The pipeline’s multiweek shutdown in December roiled markets, forcing refiners to scramble to make up the misplaced barrels.

Previous to the spill, U.S. regulators had allowed Keystone to function at a better stress than different pipelines. The Pipeline and Hazardous Supplies Security Administration on March 7 mentioned extra corrective motion was wanted to deal with the pipeline’s “repetitious sample of failures” and the “rising severity of spills.”

Keystone has been one of many leakiest crude pipelines within the U.S. since 2010, spilling greater than 25,000 barrels, with lots of these attributed to building deficiencies, in keeping with authorities knowledge.

With help from Ari Natter.

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