UPDATE 2-Regulator keeps pressure cut on Enbridge's Line 2

Mon Jun 20, 2011 5:19pm EDT

* Enbridge Line 2 ordered to lower pressure

* Regulator was concerned about cracking

* Line operating at 80 pct of normal pressure (Adds details)

CALGARY, Alberta, June 20 (Reuters) - Canadian regulators ordered Enbridge Inc (ENB.TO) to cut pressure on its 440,000 barrel per day Line 2 last October after raising concerns that the company might not be able to detect cracks in the oil pipeline.

The National Energy Board's order remains in effect. It restricts the pipeline, which runs from Edmonton, Alberta, to Superior, Wisconsin, to operating at 80 percent of normal pressure, according to documents provided by the regulator.

The board said it was concerned that Enbridge might not be able to consistently identify cracks in pipes laid before the 1970s using flash-welding techniques.

"The board notes a correlation between pre-1970s flash welded pipe and cracking-related incidents on Enbridge's pipelines," it said in its letter to the company. "The board also notes that Enbridge's hazard identification practices have not been consistently reliable in detecting, identifying and sizing cracking-related anomalies in the pre-1970s flash welded pipe."

The regulator said it has ordered the company to operate at reduced pressure until it demonstrates it can "effectively identify, assess and mitigate cracking on its Canadian pipelines".

In its letter to Enbridge, the board said it had been monitoring the investigation into a July rupture on the company's Line 6B in Michigan that spilled more than 20,000 barrels of oil into a river system.

The spill was the first of a series that occurred on Canadian-operated pipelines over the past year, with aging lines being the worst hit. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Factbox on recent pipeline ruptures: [ID:nN31290944] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Following the Michigan spill, the regulator reexamined incidents of cracking in the Enbridge lines that it oversees and said the number of cracks found in Line 2 had not decreased over time.

It set a series of conditions on the company before it will allow the line to return to normal operating pressures. They include asking Enbridge for additional testing on all parts of the line built using flash welding before 1970, and asking the company to demonstrate it can detect and mitigate cracks.

Earlier this month the board also put pressure restrictions on Enbridge's Norman Wells pipeline in the Northwest Territories after it leaked as much as 1,500 barrels of oil. That line was also cut to 80 percent of normal pressure.

Enbridge could not be reached for comment immediately. (Reporting by Scott Haggett; editing by Peter Galloway)