U.S. lifts Keystone oil pipeline pressure restrictions

(Reuters) - Pressure restrictions on TransCanada Corp's TRP.TO Keystone oil pipeline were lifted on Tuesday in a letter issued by U.S. pipeline safety regulators, a spokesman for the agency told Reuters on Thursday.

FILE PHOTO - A TransCanada Keystone Pipeline pump station operates outside Steele City, Nebraska, U.S. on March 10, 2014. REUTERS/Lane Hickenbottom/File Photo

It was not immediately clear what current flow rates are, said Darius Kirkwood, a spokesman for the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA).

The company in November shut down its 590,000-barrel-per-day Keystone pipeline, which links Alberta’s oil sands to U.S. refineries, after a spill in South Dakota and was ordered later that month to operate at reduced pressure.

Reduced flows on the pipeline had helped draw down inventories in the Cushing, Oklahoma, storage hub. A return to full capacity on the line is also expected to help relieve a bottleneck in the oil-producing province of Alberta, where increased output has run up against a shortage of pipeline and rail capacity.

The restrictions “really did have a minor impact on our throughput and so consequently, I don’t anticipate seeing a tremendous increase in our throughput once it’s lifted, based on some of the changes we’ve made already,” TransCanada’s head of liquids, Paul Miller, said on a conference call last week.

A spokesman for Calgary-based TransCanada said the restrictions in place were limited to a small section of the pipeline and had been lifted.

“We don’t expect to see significant additional volumes on Keystone,” Matthew John, a spokesman for TransCanada said in an emailed statement on Thursday.

As of Dec. 1, pressure restrictions were in place only from the pipeline’s Luverne pump station to Ludden pump station and on the segment that had the leak between Ludden to Ferney pump stations, near Amherst, South Dakota, the PHMSA letter showed.

On April 3, TransCanada requested that the remaining pressure restrictions on the pipeline be lifted and PHMSA approved the request effective on Tuesday.

“They’ve been moving historical volumes with DRA (drag-reducing agents). Just makes it easier for them to operate now,” one U.S.-based crude trader said.

Reporting by Devika Krishna Kumar in New York; editing by Grant McCool and Peter Cooney