UPDATE 1-TransCanada restarts Keystone oil pipeline

Mon Oct 22, 2012 6:19pm EDT
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* Pipeline to run at reduced pressure for up to 24 hours

* TransCanada to talk with customers regarding impact

* Oil prices fell, partly on expectation of the restart

CALGARY, Alberta, Oct 22 (Reuters) - TransCanada Corp said on Monday it had restarted its major oil pipeline to the central United States from Canada following a five-day outage to check for a potential defect on the line in the U.S. Midwest.

TransCanada, the country's largest pipeline company, said it would operate the 590,000 barrel-a-day Keystone pipeline at reduced rates for up to 24 hours while it completes its testing.

The outage of the line, which extends to southern Illinois, and the Cushing, Oklahoma, storage hub from Hardisty, Alberta, will affect scheduled shipments for this month, though the extent is not yet known, spokesman James Millar said in an email.

"We will be having direct discussions with our customers regarding the impact this will have on their deliveries to us," Millar said.

The line, which can move up to a quarter of Canada's crude exports to the United States, will return to regular contractual deliveries in November, he said.

The unplanned shutdown pushed up oil prices last week, but they have since fallen back. November crude on the New York Mercantile Exchange sank $1.32 to $88.73 a barrel on Monday on economic worries and expectations that Keystone would restart.   Continued...