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7 years ago
WRAPUP 5-Enbridge fixing key US pipeline in bid to restart
September 14, 2010 / 4:41 PM / 7 years ago

WRAPUP 5-Enbridge fixing key US pipeline in bid to restart

 * Enbridge Line 6A to be repaired Tues, restart uncertain
 * Enbridge: regulators may not require formal restart plan
 * US gov't says pipeline can't restart until deemed safe
 * Small Line 10 in New York resumes flows after 1-day halt
 * Oil prices fall as traders expect quick restart  (Recasts, adding details and analyst comments)
 By Joshua Schneyer
 NEW YORK, Sept 14 (Reuters) - Canada's Enbridge (ENB.TO) said Tuesday it was near to completing repairs on its U.S.-bound 6A oil pipeline, and might be able to restart the line without submitting to a lengthy formal approval process from U.S. regulators.
 Enbridge and U.S. pipeline regulators said they were working together to determine when the 670,000 barrel-per-day (bpd) oil pipeline could restart, after a hole in the line leaked 6,100 barrels in Illinois last Thursday. No restart date has been set yet.
 Expectations that the line could resume shipments soon helped to knock oil prices down from one-month highs on Tuesday. Line 6A ships about 5 percent of U.S oil imports.
 "We don't know yet what is required by regulators, but we may not be required to issue a formal restart plan," company spokeswoman Terri Larson told Reuters.
 TAKE A LOOK-Enbridge crude line shut      [ID:nN10265810]
 Factbox on refineries                     [ID:nN13195749]
 Factbox on outage impact                  [ID:nN13190665]
 Factbox on pipelines feeding the Midwest  [ID:nN10275799]
 History of Enbridge's pipeline spills     [ID:nN10254087]
 Graphic on Enbridge pipeline configuration:
 Restarting 6A will involve regulatory oversight, DOT said on Tuesday, without specifying what measures must be taken.
"Enbridge will not restart this line until (regulators are) satisfied that the company's repair and follow up plans ensure the safety of the community and the environment," a spokeswoman for the DOT's Pipeline and Hazardous Materials Safety Administration said.
 Depending on what regulators require of Enbridge, the pipeline could restart almost immediately or face a prolonged delay that could crimp crude supplies to the industrial Midwest and continue to push up U.S. oil prices.
 The U.S. Department of Transportation still has not approved Enbridge's formal plan to restart a smaller line called 6B, which has been shut for more than seven weeks after a major leak in Michigan.
 Enbridge said it was welding a stretch of new pipe to replace a leaky area of Line 6A it removed from the ground on Monday. The line could be fixed by late Tuesday if X-rays showed the seams were secure, Larson said.
 "My guess is they may get this (6A) pipeline back up and running without having to jump over too many hurdles, since it hasn't been out for long" said Joseph Arsenio of Arsenio Capital Management in Larkspur, California.
 "These pipeline outages have helped push oil prices up and any news of a restart will put pressure on prices."
 Oil prices rose in recent days on concern Enbridge may face lengthy regulatory delays before restarting Line 6A, a key, 467-mile (752-km) line from northern Wisconsin to Indiana.
 Enbridge has yet to receive permission from regulators to restart its 6B pipeline that leaked oil in Michigan during July, although it has been repaired since August.
 The Enbridge pipeline leaks have come at a time when energy industry safety regulations are under a spotlight following the recent, massive BP Plc (BP.L) (BP.N) oil spill in the Gulf of Mexico.
 U.S. oil futures CLc1 had touched a month-long high earlier Tuesday on concerns for long restart delays. They later dropped 39 cents to settle at $76.80 a barrel, in part on expectations that the line could restart in short order.
The 190,000 barrel-per-day 6B has been shut since a Michigan leaked of about 19,500 barrels in July.  
Larson said that the requirements to restart 6A might be different from 6B because DOT pipeline regulators had issued Enbridge a so-called Corrective Action Order on 6B this year, ordering the company to take several formal steps to address safety concerns on that line.
Enbridge hasn't received any such orders on its 6A line, which may affect the restart process.
"We may not need to go through the same steps to restart 6A," Larson said.
A Congressional transportation committee plans to hold a hearing on Wednesday with Enbridge executives including chief executive Patrick Daniel in Washington. Regulators may grill the company about its recent oil spills and discuss pipeline safety at the hearing. 
 Repairs on Line 6A in Romeoville, Illinois, are the first step in restoring flows on a conduit that, before the spill, was shipping 459,000 barrels a day of Canadian crude to a half-dozen Midwest U.S. refineries, as well as toward Cushing, Oklahoma, the delivery point for U.S. oil futures.
 Meanwhile, Enbridge said Tuesday it had resumed operations on a separate, smaller pipeline in New York state that was shut down late on Monday on suspicions a tiny volume of crude had leaked, the company said.
 Enbridge found no indication of a leak on the 91-mile (146-km) 70,000 bpd Line 10, which runs from Southern Ontario into New York. The company plans to continue closely monitoring the line for 24 hours.
 The shutdown of 6A and 6B combined with Line 10 on Monday meant three stretches of Enbridge pipeline with a combined capacity of 930,000 bpd were shut.
 The 6A line was the largest. Canada has exported nearly 2 million barrels per day (bpd) of crude oil to the United States this year, making it by far the country's largest foreign supplier. [ID:nN30180559]
 Enbridge's Toronto-traded shares rose 21 cents to C$52.09 on Tuesday.
 The Calgary-based pipeline operator was allowed to restart its biggest crude export line within a week of a major 2007 explosion that killed two workers in Minnesota, although the company was later fined $2.4 million for the incident.
 (Reporting by Joshua Schneyer and Selam Gebrekidan in New York, Tim Gardner in Washington and Erwin Seba in Dallas; Editing by Marguerita Choy and Lisa Shumaker)        

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