May 11, 2011 / 9:23 PM / in 7 years

TransCanada oil line set to restart, others down

CALGARY, Alberta (Reuters) - One of a handful of Canadian oil pipelines shut down due to leaks will resume shipments on Saturday, offering the industry a rare bit of certainty following weeks of spills and public questions over safety.

TransCanada Corp said on Wednesday it will restart the Keystone oil pipeline a week after a 500-barrel spill at a North Dakota pumping station forced the closure of the key export conduit.

The company said it expects to meet all its oil delivery commitments for May despite the shutdown of the 591,000 barrel a day line.

Keystone, which carries oil sands-derived crude to refineries in Wood River and Patoka, Illinois, and the key Cushing, Oklahoma, storage hub from Alberta, came into service last year. It is one of three major pipelines that are out of service.

The others are Plains All American Pipeline LP’s Rainbow pipeline in northern Alberta and Enbridge Inc’s Norman Wells pipeline, which extends to the Rainbow line from the Northwest Territories.

Traders said the outages have so far had minimal impact on Canadian cash crude prices, and the quick Keystone restart will mean little supply will be backed up in Western Canada.

That was the situation at the end of 2010 and early 2011, amid a string of planned and unplanned outages on Enbridge’s huge export pipeline network. It widened price spreads on Canadian heavy oil, pinching the returns of producers.

A restart date for the Rainbow pipeline is still not known. The line ruptured on April 29, spilling 28,000 barrels of light, sweet crude in a wilderness area not far from a native community. It was the largest pipeline spill in Alberta in nearly four decades.

The Rainbow line carries up to 187,000 barrels of oil a day 770 km (480 miles) south to Edmonton from Zama in northwest Alberta.

The closed section of the line was moving 75,000 barrels a day at the time of the rupture. It has been repaired and tested, and officials say they are now waiting for regulators to approve the restart as crews sop up the spilled oil.

Meanwhile, Enbridge said late on Tuesday that it discovered a small leak on its Norman Wells line.

About 4 barrels of oil seeped from the line about 50 km (31 miles) south of Wrigley, Northwest Territories. The cause has not yet been determined.

The 39,400 barrel per day line, which runs from Norman Wells, NWT, to Zama, Alberta, was already shut down because it connects with the Rainbow line.

Reporting by Jeffrey Jones and Scott Haggett; editing by Rob Wilson

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