Enbridge shuts part of key U.S. oil pipeline after fire

CALGARY, Alberta Sat Mar 3, 2012 9:31pm EST

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CALGARY, Alberta (Reuters) - Enbridge Inc shut down a key segment of the main Canada-to-United States oil pipeline for an undetermined period on Saturday after a deadly vehicle accident caused a fire at an Illinois pumping station.

The Canadian company said it was forced to shut down the 318,000 barrel-a-day "14/64" line between Superior, Wisconsin, and Griffith, Indiana, after the early-morning collision, which caused a blaze and a spill of crude near New Lenox, Illinois. That's equivalent to about 3 percent of total U.S. imports.

Enbridge, whose network carries the bulk of Canadian oil exports to the U.S. Midwest, said it did not know when the pipeline could resume flowing. It has slowed the flow of oil in two pipelines in Canada, Lines 2B and 3, which feed a total of 800,000 bpd supply into the system at Superior, Enbridge said.

"An estimated startup time is not known at this time," Enbridge spokeswoman Lorraine Little said in an email. "An update will be provided when local emergency crews and Enbridge are able to assess the extent of the damage."

Typically, minor damage to above-ground pipelines can be repaired within a week or two, barring serious environmental issues, although major damage or an extended investigation into the accident could prolong the closure.

Enbridge said it had also shut another major line between Superior and Griffith, called 6 A, as a precaution early on Saturday, but restarted it several hours later. The company's total system carries some 2 million bpd of crude.

This is Enbridge's system schematic: r.reuters.com/gyr86s

Enbridge did not provide an estimate of the amount of spilled crude.

The Chicago Sun-Times reported two men were killed, including a firefighter, and three critically injured in the accident.

Enbridge said emergency crews had contained the Illinois fire. The vehicle accident in New Lenox, 40 miles southwest of Chicago, was unrelated to its operations, it said.

CAPACITY TIGHT, PRICES HIGH

In the past, similar pipeline disruptions have caused a brief spike in U.S. oil prices, which have already surged this year to hit a nearly 10-month high last week as the United States and Europe tighten sanctions on Iran, a major producer of oil. However the impact this time could be muted by seasonal refinery maintenance, which tends to reduce demand for crude oil during the spring.

It was the second time in less than three weeks that the company had to shut down part of its system in the Upper Midwest because of a leak. On February 16, it turned off its 491,000 barrel a day Line 5 for about a day after discovering a small amount of spilled oil in Michigan's Lower Peninsula.

The 14/64 line is one of four that carry crude from the pipeline junction at Superior, Wisconsin -- a key hub for the Enbridge system -- to refineries in the Midwest. BP's large 405,000 bpd Whiting refinery and Citgo's 167,000 bpd Chicago-area refineries are both near the line's terminus.

Enbridge's larger Line 6A also runs to Chicago, although it was not clear whether there was any spare capacity on the line.

Tight pipeline capacity has been a major factor in deep discounts for Canadian crude oil in recent months, with rising oil sands and shale oil production straining the limits of existing lines and new pipelines yet to be built.

(Reporting by Jeffrey Jones; Editing by Philip Barbara)

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Comments (1)
JimsZ wrote:
Great – I live in Indiana and prices are continuing to go up… Nothing like having another reason to steal more from us!

Mar 04, 2012 2:08pm EST  --  Report as abuse
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