June 15, 2011 / 6:44 PM / 7 years ago

UPDATE 2-TransCanada cuts Keystone shipments by 11.5 pct

* June capacity on Keystone cut by 11.5 pct

* July capacity no more than 450,000 bpd

* Canadian oil prices ease (Adds details. In U.S. dollars unless noted.)

CALGARY, Alberta, June 15 (Reuters) - TransCanada Corp (TRP.TO) said on Wednesday it is curtailing oil shipments on its 591,000 barrel per day Keystone pipeline this month and next as it works on the line following two oil spills in May.

The company declared a mid-month curtailment that will cut shipments by 11.5 percent this month as it works on the line’s pumping facilities, Terry Cunha, a spokesman for the company, said.

As well, capacity on the line will be restricted to between 400,000 and 450,000 bpd in July, while the work is going on, but the company does not yet know how much oil its customers will want to put on the line.

“We are still waiting for nominations, which are due next week, but that’s what we are looking at for the maximum delivery (in July),” Cunha said.

    The work comes after spills last month at two of the line’s pumping stations in North Dakota and Kansas that shut down the line, bolstering oil prices and providing fodder to opponents of the company’s $7 billion plan to expand the system as far as the U.S. Gulf Coast.

    The Keystone line now runs from Hardisty, Alberta, to Wood River and Patoka, Illinois, and the Cushing, Oklahoma, storage hub.

    Canadian oil prices dropped following the curtailment, with Western Canada Select for July delivery down by $1.75 to $19.25 under West Texas Intermediate CLc1.

    The pipeline was shut for about a week earlier this month, which helped siphon off some of the near record levels of crude oil stored in Cushing, Oklahoma. (By Scott Haggett and Janet McGurty; editing by Peter Galloway)

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