TC Energy Corp Has Announced That It Is Aiming To Fully Reactivate The Keystone Oil Pipeline System After The Largest Reported Spill In The Pipeline's History
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Keystone comes from the Canadian province of Alberta and supplies approximately 622,000 barrels of oil per day to refineries in the Midwest and the Gulf Coast. It is one of nearly twenty pipelines that pass through the oil storage complex in Cushing - the center for pricing US West Texas Intermediate crude oil and the physical delivery point for benchmark oil futures on the New York Mercantile Exchange.
The company partially reactivated the pipeline earlier this month, but the so-called Cushing extension remained offline.
Repairs completed
Oil pipeline operator Keystone TC Energy Corp said on Thursday that it had completed repairs, inspections and testing of the pipeline and that the system was now operational at all delivery points. Last week it said it had received approval from the U.S. Pipeline and Hazardous Materials Safety Administration to restart a 300-mile branch linking Steele City, Nebraska, with a major U.S. oil storage facility in Cushing, Oklahoma.
The company said it would operate the line at reduced operating pressure. Previously, regulators allowed the pipeline to operate at a higher pressure than otherwise allowed, saving costs for the operator.
What happened?
According to TC Energy, the 2,700-mile Keystone pipeline was shut down on December 7 after a rupture in Kansas spilled about 14,000 barrels of crude oil - the largest reported spill in the pipeline's history.
TC Energy said it shut down the pipeline, a key conduit for Canadian oil to the US, at around 8pm local time on Wednesday after detecting a pressure drop in its systems. The company said it has since mobilized teams to stop oil spilling into a stream about 20 miles south of Steele City, Nebraska.
The affected segment was isolated and outriggers were deployed to control the downstream migration of versions. The system remained disabled as crews actively responded and worked to contain and recover the oil.
Despite the scarcity of oil entering Cushing, there were about 25 million barrels in storage tanks in the week ending December 23, according to the Energy Information Administration, about a million more than at the start of the month. The buildup was partly attributed to traders shipping more oil from the Gulf Coast to Oklahoma as they sought to store and sell barrels at a profit at a later date.
TC Energy did not say what caused the spill, prompting stream cleanup operations involving hundreds of people. Cleaning continues. As of December 20, TC Energy had extracted 7,599 barrels of oil from the stream, according to the company's records. It has not been stated when the repair and repair operations will be completed.
How has this affected oil prices?
U.S. oil prices rose more than 2% on Thursday morning (8th druph) after the Keystone Pipeline initiated an emergency shutdown to contain a spill near the Nebraska-Kansas border.
On the other hand, West Texas Intermediate futures fell to $78.40 a barrel on Thursday after announcing the end of the repair.
TC Energy Corp Share Prices
The company's shares are the worst of the year at 39.65. A sharp drop from 43.20 occurred a few days after the pipeline leak.
Source: wsj.com, finance.yahoo.com
