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Oil and Gas

Enbridge may shut Bakken oil rail terminal in sulfide gas dispute

NEW YORK, May 15 (Reuters) - Enbridge Energy Partners said it may be forced to shut down an 80,000 barrel-per-day (bpd) oil-loading rail terminal in North Dakota unless the amount of potentially deadly hydrogen sulfide in crude oil delivered to the facility can be reduced.

Last week, Enbridge asked for a ruling in one day from the U.S. Federal Energy Regulatory Commission (FERC) to restrict the amount of hydrogen sulfide in the delivered crude. That request came after a very large concentration of the gas was discovered in a tank at Berthold, North Dakota, on May 5.

Plains Marketing, part of Plains All American Pipeline LP , objected to Enbridge’s request and asked FERC to reject it. The company ships crude oil on Enbridge’s North Dakota system and into the Enbridge rail terminal.

In a filing late on Tuesday, Enbridge countered Plains’ objections, arguing that without the new limits its employees who stand on top of rail tank cars to pump crude at its terminal could be exposed to harmful vapors.

In small doses, hydrogen sulfide will irritate eyes, nose and throat, the Enbridge filing said. But the company said it found 1,200 ppm (parts per million) in one of its tanks.

“Exposure at 50 ppm or above could cause shock, convulsions, coma or death,” Enbridge said in the filing, noting that at levels above 200 ppm, “respiratory failure can occur within seconds after only a few inhalations.”

The company is seeking to limit the amount of the harmful gas in the delivered crude to 5 ppm. Other pipeline companies have a threshold of 10 ppm, Plains argued.

“....if the hydrogen sulfide continues to be present at the levels found on May 5, 2013, the downstream rail facility served by Enbridge North Dakota’s Berthold terminal would have to shut down its rail facility with 80,000 barrels a day of capacity,” Enbridge said in the filing.

Tesoro High Plains Pipeline Co, which sits downstream of the Enbridge North Dakota system, said last year it would reject any crude with hydrogen sulfide content greater than 5 ppm, Enbridge noted.

Rail shipment of crude has become an option for moving oil out of high production basins with little pipeline access. It has added to the recent narrowing of the spread, or price differential, between the benchmark U.S. crude, West Texas Intermediate, and global crude oil benchmark Brent, to its smallest range in more than two years.

Phillips 66 signed up in March to ship 40,000 barrels per day of crude by rail from the Enbridge Berthold terminal.

North Dakota oil production hit a new high in March at 782,800 barrels a day, state government data showed on Wednesday.

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