U.S. oks restart of Keystone pipeline

Sat Jun 4, 2011 6:58pm EDT
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By Tom Doggett and Jeffrey Jones

WASHINGTON/CALGARY (Reuters) - TransCanada Corp can restart its Keystone oil pipeline on Sunday, after the company satisfied a series of safety conditions following leaks that idled the key export line twice in less than a month, the U.S. pipeline safety regulator said on Saturday.

The U.S. Pipeline and Hazardous Materials Safety Administration said it approved resumption of crude flows from Canada on the pipeline after the agency evaluated the company's restart plan and was satisfied safety requirements were met.

PHMSA issued a corrective action order on Friday, demanding the company agree to a series of immediate and long-term measures following an outage last Sunday on the 591,000 barrel-a-day pipeline that runs to the oil pricing hub of Cushing, Oklahoma, from Alberta.

In that incident, 10 barrels spilled due to a faulty fitting at a Kansas pump station.

The outage raised oil prices as it limited oil shipments from Canada, the largest crude supplier to the United States. Canadian cash oil prices weakened as supplies backed up in Alberta.

In early May, Keystone was shut down for nearly a week after a 500-barrel spill at a pump station in North Dakota, which TransCanada blamed on a different piece of equipment.

In its corrective action order, PHMSA revealed a leak in South Dakota on May 25, but said it was below the threshold for reporting it.

With immediate repairs completed, PHMSA had said TransCanada must perform metallurgical testing, analysis of the failures and review other parts of the year-old system.   Continued...