UPDATE 2-Oil products line shut at Texas City after leak

Thu Feb 24, 2011 3:54pm EST

Related Topics

* Estimated 6,000 barrels of gasoline spills

* Valves closed to isolate leak, but spill may grow

* No word on possible effects on fuel supplies

* Line is 18-inch running 40 miles to Pasadena

(Adds market reaction, 30 houses evacuated, other details)

By Erwin Seba

TEXAS CITY, Texas, Feb 24 (Reuters) - Magellan Midstream Partners (MMP.N) shut an 18-inch diameter (46-cm) oil products pipeline at Texas City, Texas, after a 6,000-barrel leak of gasoline, the company said Thursday.

The pipeline is a common carrier that runs 40 miles (64 km) north from Texas City to Pasadena, Texas, and is one of a number of pipelines between the two refining centers, officials said. Texas City is about 40 miles southeast of Houston.

There was no word from the company or other officials on possible effects on fuel supplies.

Gulf Coast gasoline gained 0.25 cent and Group 3 diesel rose 1.40 cents after the pipe shutdown was announced.

Thirty nearby homes were evacuated following the leak's discovery and a state highway along with several streets were closed due to spilled gasoline, which could be smelled around the area.

Ten people went to an evacuation center, according to U.S. Coast Guard Commander Jim Elliott, who is overseeing the containment and clean-up of the spill. Other evacuees went to homes of friends and family.

"It's a volatile product so we're concerned about public safety," Elliott said.

The leak was discovered about 1 a.m. local time (0700 GMT), a company spokesman said.

"It was discovered in the control room when there was a sudden pressure drop," Magellan spokesman Bruce Heine said. Valves on either side of the pipeline leak were closed, but it was unclear whether additional gasoline would spill as the isolated section drained.

The company planned a revised estimate of the spill volume later, Heine said.

Texas City abuts Galveston Bay and the spill occurred near a small bayou that has been boomed off as a precaution, but no water had been affected, Elliott said. A flood gate was closed between a lake fed by the bayou and Galveston Bay as a precaution. (Additional reporting by Kristen Hays; Editing by Lisa Shumaker)

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