TransCanada Corp. (NYSE: TRP) said on April 7 about 400 barrels (bbl) could have spilled in South Dakota from its 590,000 bbl/d Keystone crude oil pipeline. The company said it provided the spill volume estimate to regulators in the morning on April 7 based on the excavation of soil to expose over 100 feet of pipe while it continues to investigate the source of the spill. The line, which delivers crude from Hardisty, Alberta, to Cushing, Okla., and on to Illinois, was shut over the weekend after a potential leak in South Dakota. TransCanada had told shippers the pipeline would restart by April 12 at the earliest, trade sources said. « Quick fix is not how we would characterize this, at all, » TransCanada spokesman Mark Cooper said, adding that the company has made « significant progress » in pinpointing the source of the problem in a safe manner. He said the company would like the pipeline to be operational as quickly as possible, but is focusing on doing so safely and with regulatory support. TransCanada also said it was going to ask the Pipeline Hazardous Materials Safety Administration (PHMSA) to repressurize the line in order to find the leak, a source said, a move which could potentially expedite its restart. A spokesman for PHMSA said it was still monitoring the situation and that the oil spilled is Surmont heavy-blend crude. In a shipper notice, TransCanada also said it was curtailing shipments on its pipeline by 35% for the remainder of April. The outage, which stemmed the flow of Canadian crude further south, caused cash prices to dive to a two-month low below the West Texas Intermediate benchmark. Time spreads in U.S. crude futures contracts rallied late April 5 following news of the delay, with May WTI trading as tightly as 98 cents a barrel below June WTI, up from a $1.46 a barrel discount earlier in the day. News of an extended delay also boosted futures prices, as traders pointed out that it would divert crude otherwise moving toward Cushing, Okla., delivery point of the contract. The outage has forced refiner Phillips 66 (NYSE: PSX) to cut run rates and shut units at its 306,000 bbl/d Wood River refinery.
AVR