* Line was shut last Sunday after leak in Kansas
* Pipeline can transport 591,000 barrels of oil a day
* Shutdown raised crude oil prices when supply cut off
(Adds comment from U.S. pipeline regulator)
By Tom Doggett and Jeffrey Jones
WASHINGTON/CALGARY, June 4 TransCanada Corp
(TRP.TO) can restart its Keystone oil pipeline on Sunday, after
the company satisfied a series of safety conditions following
leaks that idled the key export line twice in less than a
month, the U.S. pipeline safety regulator said on Saturday.
The U.S. Pipeline and Hazardous Materials Safety
Administration said it approved resumption of crude flows from
Canada on the pipeline after the agency evaluated the company's
restart plan and was satisfied safety requirements were met.
PHMSA issued a corrective action order on Friday, demanding
the company agree to a series of immediate and long-term
measures following an outage last Sunday on the 591,000
barrel-a-day pipeline that runs to the oil pricing hub of
Cushing, Oklahoma, from Alberta.
In that incident, 10 barrels spilled due to a faulty
fitting at a Kansas pump station.
The outage raised oil prices as it limited oil shipments
from Canada, the largest crude supplier to the United States.
Canadian cash oil prices weakened as supplies backed up in
In early May, Keystone was shut down for nearly a week
after a 500-barrel spill at a pump station in North Dakota,
which TransCanada blamed on a different piece of equipment.
In its corrective action order, PHMSA revealed a leak in
South Dakota on May 25, but said it was below the threshold for
With immediate repairs completed, PHMSA had said
TransCanada must perform metallurgical testing, analysis of the
failures and review other parts of the year-old system.
"Based on a review of the information submitted, the
restart plan is approved," PHMSA said a letter to TransCanada
The earliest the company can restart the pipeline is at
daylight on Sunday morning, the agency said. TransCanada
officials could not immediately be reached for comment about
the company's restart plan.
Concerns about safety have come as TransCanada seeks U.S.
State Department approval for a controversial $7 billion
expansion of the Keystone system, which would carry crude
derived from Canada's oil sands as far as the U.S. Gulf Coast.
Environmental groups cited the pipeline leaks and PHMSA's
order requiring a safety review as reasons the Obama
administration should turn down TransCanada's request to expand
(Reporting by Tom Doggett; Additional reporting by Jeffrey
Jones in Calgary, Editing by Peter Cooney)