March 9, 2012 / 3:03 PM / 6 years ago

Enbridge restarts U.S. oil pipeline segment

CALGARY, Alberta (Reuters) - Enbridge Inc (ENB.TO) said on Friday it had restarted the remaining segment of a major U.S. Midwest oil pipeline it was forced to shut down on the weekend when a deadly traffic accident damaged an above-ground section in Illinois.

Line 64, the easternmost part of Enbridge’s 318,000 barrel-per-day Line 14/64, had been shut since Saturday, squeezing already tight pipeline capacity for Canadian crude exports. The Line 14 segment had restarted on Tuesday.

The company is still working on an estimate for the volume of oil spilled in the incident at a pumping station near the township of New Lenox, Illinois, about 70 miles southwest of Chicago.

Two people were killed in the fiery wreck that was said to have occurred when the driver of a car racing an SUV lost control, smashed through a chain-link fence at the Enbridge facility and hit the section of pipeline.

The accident exposed just how tight transport capacity to major U.S. refining markets is for Canadian crude with production from the Alberta tar sands surging. The situation was already weighing on prices for Canadian oil versus international grades before the outage.

The Line 14/64 system, whose volume is equal to about 3 percent of total U.S. oil imports, runs to Griffith, Indiana, from Enbridge’s storage hub at Superior, Wisconsin.

The company had cautioned that the outage could lead to slow-downs or shutdowns of pipelines between Alberta and Superior, or lines that feed supply to the major trunk system from production facilities, but spokeswoman Lorraine Little said on Friday the company now expects to manage the month’s nominated volumes.

Despite the restart, Canadian crude spreads widened on Friday. Western Canada Select heavy blend for April delivery was quoted at $34.75 a barrel under benchmark West Texas Intermediate, about $1 wider than on Thursday.

April light synthetic sold for $15 a barrel under WTI, about a $4 deeper discount than the day before.

Several refineries in major markets, including the U.S. Midwest, Alberta and the West Coast, have begun planned maintenance or experienced equipment failure over the past week.

Reporting by Jeffrey Jones in Calgary and Naveen Arul in Bangalore; Editing by Marguerita Choy and Lisa Shumaker

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