TC Energy to restart Keystone oil pipeline segment after regulator approval

Investigators, cleanup crews begin scouring oil pipeline spill in Kansas
Emergency crews work to clean up the largest U.S. crude oil spill in nearly a decade, following the leak at the Keystone pipeline operated by TC Energy in rural Washington County, Kansas, U.S., December 9, 2022. REUTERS/Drone Base

Dec 23 (Reuters) - TC Energy Corp (TRP.TO) said on Friday a U.S. regulator had approved a restart plan for an idled segment of its Keystone oil pipeline to Cushing, Oklahoma, and it looked to restore service after several days of testing and inspections.

The 622,000-barrel-per-day (bpd) pipeline was shut on Dec. 7 after it spilled 14,000 barrels of oil in rural Kansas, the biggest U.S. spill in nine years.

The pipeline from the Canadian province of Alberta to the U.S. Gulf Coast has since reopened, except for the segment that ruptured between Steele City, Nebraska, and an oil storage hub in Cushing, Oklahoma.

The shutdown reduced the flow of Canadian crude to Gulf refineries, but it has had little impact on Canadian oil prices, partly because of ample storage in Alberta.

"We will provide an update on in-service once we are able," said Calgary, Alberta-based TC, noting that the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) had approved the restart plan.

The pipeline has had 12 significant incidents in as many years of its life, including major spills in 2017 and 2019, according to the Pipeline Safety Trust, a watchdog group.

Neither TC nor PHMSA has publicly identified the cause of the spill. Frigid weather at the spill site may slow work, TC said.

"It seems irresponsible to restart operations without identifying the root cause failure first," said Zack Pistora, Kansas lobbyist for environmental group Sierra Club.

Under terms of PHMSA's corrective action order issued to TC after the spill, the company must operate at 20% lower pressure along the segment that ruptured once it returns to service until it receives further regulatory approval.

Keystone has been allowed to operate at higher than normal pressure under a special permit from PHMSA, but the regulator is reviewing that permit system.

Spill clean-up may take weeks or months, even as the pipeline restarts. The line carried diluted bitumen, a form of oil that tends to sink in water, making it harder to collect than oils that float.

Clean-up workers will remain on site despite the cold, although some may work remotely, said Curtis Carey, spokesperson for the U.S. Environmental Protection Agency.

Skimmers, pumps and other equipment were removed from Mill Creek on Wednesday to prevent them from freezing, but workers are deploying other equipment more suited to the cold, he said.

TC shares rose 2.2% in Toronto.

Reporting by Deep Vakil in Bengaluru and Rod Nickel in Winnipeg; editing by Kirsten Donovan, Jason Neely and Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

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