August 6, 2010 / 9:43 PM / 7 years ago

WRAPUP 1-Start-up unknown as Enbridge cuts out oil pipe

* Damaged pipeline section cut out for analysis

* Replacement piece could be in place this weekend

* Line will run at reduced rate on start-up (In U.S. dollars unless noted)

By Jeffrey Jones

CALGARY, Alberta, Aug 6 (Reuters) - Enbridge Inc (ENB.TO) extracted the ruptured section of pipeline on Friday that had caused crude oil to foul part of southern Michigan, but U.S. regulators will have the final say on any schedule for restarting the line.

With start-up timing still unknown, a third U.S. refinery has been forced to cut output due to a shortage of crude that would normally flow on Enbridge’s Line 6B.

The 190,000 barrel a day pipeline broke open on July 26 near Marshall, Michigan. The line serves refineries in Michigan, Ohio, Pennsylvania and Ontario that produce more than 700,000 barrels a day.

A new section of pipe, replacing the damaged one that will be sent to Washington for analysis, could be in place this weekend, said Steve Wuori, president of Enbridge’s liquids pipelines division.

However, the company, which ships most of Canada’s crude oil exports to the United States, must work with the U.S. National Transportation Safety Board and Environmental Protection Agency on the plans and timing for resuming flows of crude on the line, he said.

“That’s dependent on determination when we finish the removal of the pipe and replacement of it. We don’t have a specific restart time,” Wuori said during a conference call.

When oil flows again, the pipeline will run at reduced rates until regulators are convinced it is safe, Enbridge Chief Executive Pat Daniel said.

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Factbox on the impact on refiners [ID:nN05262825]

Graphic of the pipeline and refiners affected here

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PROBE OF ENTIRE LINE URGED

    Michigan Representative Mark Schauer, whose congressional district includes the spill zone, called on the U.S. Department of Transportation and Enbridge to ensure the safety of the entire pipeline to Sarnia, Ontario, from Indiana, and hold a public meeting on the findings, before restarting it.

    The outage caused more headaches for refiners. Sunoco Inc (SUN.N) was running its 160,000 barrel a day Toledo, Ohio, refinery at reduced rates, a source said. [ID:nN06239668]

    It followed United Refining Co, which reduced rates 35 percent at its Warren, Pennsylvania, refinery, and BP Plc’s (BP.L) and Husky Energy Inc’s (HSE.TO) Toledo plant, which also cut runs.

    Sarnia-area refiners, including Imperial Oil Ltd (IMO.TO), Suncor Energy Inc (SU.TO) and Royal Dutch Shell (RDSa.L), have reported no reduction in output, but have been forced to scramble for alternative supplies on other pipelines.

    The outage has pressured prices for Canadian heavy crude on the cash market, trading sources have said.

    The July 26 rupture spilled an estimated 19,500 barrels of heavy Cold Lake Blend crude into the Kalamazoo River system, forcing a cleanup effort involving more than 800 workers and 120,000 feet (36,580 metres) of containment and absorbent boom.

    U.S. officials and the company said oil sheen on the river is dissipating as cleanup efforts continue in the region.

    The spill represents one of the largest pipeline leaks in recent U.S. history. It arguably gained increased profile against the backdrop of the much bigger BP disaster in the Gulf of Mexico.

    Enbridge shares fell 4 Canadian cents to C$51.72 on the Toronto Stock Exchange on Friday. Its U.S. affiliate, Enbridge Energy Partners (EEP.N), rose 13 cents to $57.04 in New York.

    $1=$1.02 Canadian Additional reporting by Janet McGurty in New York; editing by Rob Wilson

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