* Keystone pipeline shut down for second time this month
* Line to remain shut for a few more days
* 10-barrel leak in Kansas caused by faulty fitting
* Parts of Enbridge U.S. network shut by storms
* Oil prices rise on shutdown
(Add details and comment; updates prices. In U.S. dollars
By Scott Haggett
CALGARY, Alberta, May 31 TransCanada Corp
(TRP.TO) said on Tuesday it will take a few more days to reopen
its 591,000 barrel per day Keystone oil pipeline after its
second spill in less than a month shut the line, pushing oil
The line was shut on Sunday after a half-inch fitting
failed at the Severance pumping station in Kansas. The fitting
leaked less than 10 barrels (420 gallons) of oil, said company
spokesman Terry Cunha, down from an earlier estimate of a
A problem with a larger fitting was blamed for a 500-barrel
leak earlier this month at another Keystone pumping station in
North Dakota. That shut the line for six days while the company
replaced similar fittings at its other pumping stations.
Cunha said TransCanada will now have to examine fittings in
21 pumping stations similar to the one that failed, delaying
the reopening of the line.
"The restart will probably not be for a few more days," he
said. "We'll go through those 21 (stations) and investigate to
ensure those fittings are working properly."
Canada is the largest supplier of oil to the United
States, shipping about 2 million barrels a day, but the
pipelines that deliver that crude have been subject to leaks,
spills and shutdowns.
Enbridge Inc (ENB.TO), whose lines carry the bulk of
Canada's crude exports, said storm-related power outages over
the weekend shut down a number of its oil pipelines in the U.S.
upper Midwest [ID:nN31299604]. The system was expected to
return to normal operations later on Tuesday.
Keystone which runs from Hardisty, Alberta, to Cushing,
Oklahoma, is a key feed for the Cushing oil storage hub, the
pricing point for the New York Mercantile Exchange's benchmark
U.S. crude prices CLc1 rallied on news of the outage,
rising at one stage by almost $3 a barrel to a high of $103.39
on Tuesday, climbing faster than London-based benchmark Brent
LCOc1. Prices had pulled back on weaker U.S. economic data,
but closed at $102.70 a barrel, up $2.11.
Differentials for West Texas Sour crude moved up about 25
cents on the news of the pipeline shutdown, traders said, with
bids holding $2.25 under benchmark West Texas Intermediate
CLc1 and offers up 10 cents to $2.15 under.
"I think it (WTS) is partly being used as a backup if the
line is down for a while," said John Troland, an independent
oil consultant based in Houston.
Record levels of crude at Cushing should mitigate any large
price moves. Last week, inventories at the oil delivery hub
stood at 40.1 million barrels, slightly below the record high
of 41.9 million reached earlier in May.
The shutdowns had little immediate effect on Canadian cash
For a factbox of recent pipeline ruptures click on
The U.S. government is investigating the cause of the leak,
the Transportation Department's Pipeline and Hazardous
Materials Safety Administration said on Tuesday.
The probe "will examine if there are similarities between
this weekend's failure and any prior failures on the system,"
including the one earlier this month, an agency spokeswoman
The spills come at an inopportune time for TransCanada,
which is seeking approval of a $7 billion expansion of
The Keystone XL project would add a line from Hardisty,
Alberta, to Steele City, Nebraska, and an extension from
Cushing to Nederland, Texas, to take Canadian crude oil to the
Gulf Coast refining hub.
The extension has been bitterly opposed by some state and
federal legislators, as well as environmental groups concerned
about greenhouse gas emissions from expanded oil sands
There are also concerns about the threat of oil spills in
sensitive areas along the route. Opponents will likely use the
weekend spill to further bolster their case against the line.
The U.S. State Department is expected to rule on whether to
approve the line by year end.
(Additional reporting by Jeffrey Jones, Julie Gordon, David
Sheppard, Ayesha Roscoe, Erwin Seba and Janet McGurty; editing
by Rob Wilson)