Outage forces Enbridge to ration oil pipeline space

Mon Aug 23, 2010 5:38pm EDT
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - The outage of an Enbridge Inc pipeline after last month's rupture and oil spill in Michigan has forced the company to limit the volumes its shippers had planned to move on two other major lines in its U.S. system, the company said on Monday.

The imposition of space rationing, or apportionment, for oil volumes set for shipment in September further complicates affairs for heavy oil producers in Western Canada and refiners in the U.S. upper Midwest and southern Ontario, which have struggled with the situation for four weeks.

Enbridge, whose pipelines ship the bulk of Canada's oil exports to the United States, is cutting back shippers' nominations on Line 5, a 490,000 barrel a day pipeline to Sarnia, Ontario, from Superior, Wisconsin, by 26 percent.

It is also apportioning Southern Access, a 400,000 bpd line to Flanagan, Illinois, from Superior, that is also known as Line 61, by 23 percent, spokeswoman Gina Jordan said.

Enbridge reduced overall volumes on Line 5 by 8 percent earlier in August, but did not impose apportionment. The rationing for September does not mean further overall reductions in oil flows on the two lines.

The squeeze on nominations represents the latest headache stemming from the July 26 rupture of Line 6B near Marshall, Michigan, which spilled 19,500 barrels of heavy Canadian crude into the Kalamazoo River system and prompted a cleanup effort involving about 1,500 people.

Enbridge is still awaiting approval from an arm of the U.S. Department of Transportation so it can perform pressure testing on locations apart from the spill site, as well as a ruling on its plan to restart the 190,000 bpd pipeline, Jordan said.

The regulator rejected Enbridge's initial plan and ordered it to perform more testing on Line 6B.   Continued...