Enbridge oil pipeline leak could mean market disruption: traders

Thu Feb 23, 2017 6:35pm EST
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CALGARY, Alberta (Reuters) - Some shippers on an Enbridge Inc (ENB.TO: Quote) crude pipeline shuttered for three weeks have been scrambling to find oil condensate after the company said the pipeline in Canada's Alberta will be out of action for three weeks.

The outage, which came after the Line 2A pipe between Edmonton, Alberta, and Cromer, Manitoba, was damaged last Friday, could lead to a spike in prices and market disruption, two traders whose companies ship on the line said on Thursday.

The extent of that would depend on whether the company could shift products onto its Line 3, one trader said.

Enbridge's shuttered line ships 440,000 barrels per day of light sweet and synthetic crudes and condensate.

The line was shut between Edmonton and Hardisty, Alberta, after Enbridge said it was damaged during unrelated construction work in the area by crews from rival pipeline company TransCanada Corp (TRP.TO: Quote), causing a 1,250-barrel condensate leak.

"We are having to scramble to find some condensate from other locations," one trader said. "In the short term, depending on what people need, there could be a spike in prices."

Mark Oberstoetter, an analyst at Wood Mackenzie, said some refiners will need to turn elsewhere for feedstock, but they will not be heavily affected as refinery runs are down due to the maintenance season.

"It's kind of a fortuitous timing," he said. "We are seeing a million barrels less runs."

Elsewhere crude, such as those from the Bakken oil patch, may increase in price in the next few days, Oberstoetter said.   Continued...

The Enbridge Tower is pictured on Jasper Avenue in Edmonton, Alberta, Canada on August 4, 2012.  REUTERS/Dan Riedlhuber/File Photo