May 10, 2011 / 3:12 PM / 9 years ago

UPDATE 4-Keystone oil pipeline likely shut until weekend

* Keystone to remain closed until weekend

* Company expects to make all May deliveries

* Line accounts for about 20 pct of US imports from Canada (Adds link to factbox)

By Scott Haggett

CALGARY, Alberta, May 10 (Reuters) - TransCanada Corp’s (TRP.TO) 591,000 barrel per day Keystone pipeline will likely remain shut until the weekend after a 500-barrel oil spill at a North Dakota pumping station on Saturday, a spokesman said on Tuesday, .

The pipeline, which takes oil from Alberta to Patoka and Wood River, Illinois, and the key oil storage hub of Cushing, Oklahoma, won’t reopen as early as the company first expected, TransCanada’s Terry Cunha said in an email.

TransCanada is inspecting some fittings at all its pumping stations after one failed at the Ludden station, about 65 km (40 miles) southwest of Milnor, North Dakota, spilling oil within the facility.

The line was carrying about 400,000 bpd at the time of the shutdown, about 20 percent of Canada’s daily oil exports to the United States. TransCanada says it still expects to make all its scheduled deliveries this month.

“There is no market impact,” Cunha said.


For a factbox of recent pipeline ruptures click on [ID:nN10130537]


The shutdown could lower storage levels at the Cushing hub, the pricing point for the New York Mercantile Exchange benchmark West Texas Intermediate crude contract, and could support oil prices, which have climbed more than $6 a barrel over the past two days to $103.88 per barrel.

However, closing the line has had little impact on the price of Western Canada Select, a widely traded heavy oil blend. It is selling at a discount of about $17.35 a barrel to WTI prices from $16.85 under the benchmark last week.

One trader said the effect on prices was muted because there is enough spare capacity on the line to quickly make up for any delayed shipments.

The Keystone shutdown is the latest in a spate of pipeline spills. Plains All American Pipeline LP’s (PAA.N) Rainbow pipeline ruptured in northern Alberta on April 29, spilling 28,000 barrels of crude and shutting the 187,000 bpd line.

As well, Kinder Morgan Energy Partners’s KMP.N 300,000 bpd Trans Mountain oil pipeline was shut for five days from April 22 after a small leak was spotted on the line’s right-of-way 150 km west of Edmonton, Alberta. (Additional reporting by Jeffrey Jones; editing by Janet Guttsman)

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