TransCanada reiterates Keystone line back this week

Wed Jun 1, 2011 12:03pm EDT
 
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By Erwin Seba

BENDENA, Kansas (Reuters) - TransCanada Corp on Wednesday reiterated it expects its 591,000 barrel-per-day Keystone oil pipeline to return to service in the coming days after it was shut due to a leak.

The line was pumping about 480,000 bpd of crude before a before a half-inch fitting failed at the Severance pumping station in Kansas on Sunday, spokesman Terry Cunha said, leaking about 10 barrels (420 gallons) of oil.

Keystone, which runs from Hardisty, Alberta, to Cushing, Oklahoma, is a key feed for the Cushing oil storage hub, the pricing point for the New York Mercantile Exchange's benchmark crude contract.

The shutdown helped push U.S. crude futures up by as much as $3 a barrel earlier in the week. U.S. oil traded down 95 cents to $101.75 a barrel on Wednesday.

Most of the spill was contained within containment dams set up at the pumping station, but some oil escaped as mist and workers cut back prairie grass that had been sprayed.

Cleanup work was expected to be completed in 24 to 48 hours.

A problem with a larger fitting was blamed for a 500-barrel leak earlier this month at another Keystone pumping station in North Dakota. That shut the line for six days while the company replaced similar fittings at its other pumping stations.

(Reporting by Erwin Seba; Editing by Lisa Shumaker)