Part of Keystone oil pipeline remains shut after potential leak

Environment

FILE PHOTO: A TransCanada Keystone Pipeline pump station operates outside Steele City, Nebraska March 10, 2014. REUTERS/Lane Hickenbottom/File Photo

(Reuters) – A portion of TransCanada Corp’s Keystone oil pipeline remained shut on Thursday for investigation of a possible leak on its right-of-way near St. Louis, Missouri, a company spokesman said.

TransCanada shut the pipeline on Wednesday between Steele City, Nebraska and Patoka, Illinois and sent crews to assess the situation, spokesman 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 U.S. refineries.

Two pipelines operating near the release site will be excavated on Friday to determine the source of the leak, said Darius Kirkwood, a spokesman for the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration. The agency is monitoring the response to the reported leak, he said.

Canadian pipelines are already congested because of expanding production in recent years, forcing the Alberta provincial government to order production cuts starting last month. Canadian heavy oil has attracted greater demand following U.S. sanctions against Venezuela’s state oil company.

The discount on Canadian heavy crude compared to U.S. light oil widened to $10.15 per barrel on Thursday morning from $9.40 earlier, according to Net Energy Exchange.

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

An official with the Missouri Department of Natural Resources said on Wednesday that the release of oil had stopped and it planned to find the leak on Thursday.

The Missouri Department of Natural Resources did not immediately respond to a request for comment on Thursday.

Reporting by Rod Nickel in Winnipeg, Manitoba, Devika Krishna Kumar in New York and Harshith Aranya in Bengaluru; Editing by Alistair Bell and Grant McCool

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