June 3, 2014 / 10:09 PM / 3 years ago

UPDATE 2-Enbridge shuts Line 6B, imposes extra rationing on crude network

(Adds spokesman’s quote, exact capacity of line)

By Nia Williams

CALGARY, Alberta, June 3 (Reuters) - Enbridge Inc shut part of its crude oil export network between Canada and the United States on Tuesday following a third party power outage, a company spokesman said.

Four market sources said Enbridge also imposed mid-month apportionment on two other pipelines in its Mainline system, further rationing the amount of crude shippers can transport and pushing Canadian crude prices lower.

Line 6B, which carries crude between Griffith, Indiana, and Sarnia, Ontario, shut down in the early hours of Tuesday morning and is expected to be back to normal by the evening.

“We expect the line to be back up soon and don’t anticipate any impacts to deliveries,” said Enbridge spokesman Graham White.

The line is in the process of being expanded up to 500,000 barrels per day from its previous capacity of 230,000 bpd. White said current capacity is about 263,000 bpd.

It is the second such shutdown in less than a month on the Enbridge Mainline network, which transports the bulk of Canadian crude exports to the United States.

The 796,000 bpd Line 4 between Edmonton, Alberta, and Superior, Wisconsin, was shut for two days in early May after a transmission line feeding two pump stations in Saskatchewan failed.

Four market sources in Canada’s oil capital Calgary said Enbridge rationed space on Line 4 by a further 6 percent on Tuesday. The line has already been apportioned for June.

The company also announced mid-month apportionment of 6 percent on the 450,000 bpd Line 67 between Hardisty, Alberta, and Superior, Wisconsin, meaning shippers will only be able to move 94 percent of nominated volumes.

The extra rationing only applies to crude travelling past Kerrobert, Saskatchewan, meaning nominated volumes upstream of that point will be unaffected.

Enbridge declined to comment on the mid-month apportionment.

Pipeline outages and increased apportionment leads to more crude getting bottlenecked in Alberta and can weigh on prices.

Western Canada Select heavy blend for July delivery fell to $20.35 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers. That compares with a settlement price on Monday of $19.65 per barrel below WTI.

WCS for June delivery dropped to $24.50 per barrel below WTI, having traded at $23.50 per barrel below the benchmark on Monday.

Light synthetic crude from the oil sands for July delivery also slid, last trading at $2.00 per barrel below WTI. (Editing by Chris Reese, Eric Walsh ; Editing by Richard Chang)

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