TransCanada ordered to run Keystone pipeline at reduced pressure

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

(Reuters) - TransCanada Corp’s Keystone crude pipeline must operate at a 20 percent pressure reduction after it restarts, the U.S. pipeline regulator said on Tuesday, nearly two weeks after the line was shut after it leaked 5,000 barrels of oil in South Dakota.

Calgary-based TransCanada shut the 590,000 barrel-per-day pipeline, one of Canada’s main crude export routes linking Alberta to U.S. refineries, on Nov. 16 after a leak was detected.

The pipeline restarted on Tuesday, a spokesman said, although he added there was no timeline for when the Pipeline and Hazardous Materials Safety Administration (PHMSA) would allow it to return to full capacity.

In a corrective action order on Tuesday, PHMSA said its investigation is ongoing, although its preliminary findings showed TransCanada and PHMSA identified the source of the release on Nov. 26.

“The rupture has characteristics of mechanical damage from original construction,” it said. “Preliminary information indicates the failure may have been caused by mechanical damage to the pipeline and coating associated with a weight installed on the pipeline in 2008.”

The pipeline was constructed from June 2008 until March 2010. Weights are placed on the pipeline in areas where water could potentially result in buoyancy concerns, it added.

TransCanada has removed the portion of pipeline containing the failure location and will ship it to a lab for testing, the order said.

It is not clear when the pressure restriction would be removed, although the order notes the Director may allow the removal or modification upon written request from TransCanada demonstrating that restoration to normal pressure is justified.

Reporting by Catherine Ngai; Editing by Leslie Adler and Chris Reese