TransCanada’s Keystone pipeline still partly shut after Missouri leak

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NEW YORK (Reuters) – TransCanada Corp said on Monday a stretch of its Keystone crude pipeline from Nebraska to Illinois remained shut after a leak was discovered in the area of St. Louis, Missouri, last week.

The cause and source of the spill have not been determined and there is no estimated timeline for a restart, TransCanada spokesman Terry Cunha said in an email. The closure affects the line that runs from Steele City, Nebraska, to Patoka, Illinois.

The 590,000 barrels-per-day Keystone pipeline system is a critical artery taking Canadian crude from northern Alberta to refineries in the U.S. Midwest.

TransCanada told Keystone shippers last week it was declaring force majeure on shipments affected by the shutdown, according to a notice seen by Reuters. Force majeure is a declaration that unforeseeable circumstances prevented a party from fulfilling a contract.

Canadian pipelines have been running at capacity as a production surge in Alberta overwhelmed existing pipeline infrastructure, forcing the Alberta provincial government to order production cuts starting last month.

Western Canadian heavy crude has attracted greater demand in recent days following U.S. sanctions against Venezuela’s state oil company.

The discount on Canadian heavy crude compared with U.S. light oil traded at about $11.50 per barrel on Monday, slightly wider than Friday’s level of about $11 a barrel, according to Net Energy Exchange.

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Excavation crews worked through the weekend, but work was hampered by inclement weather, a spokesman for Missouri’s Department of Natural Resources said.

The total amount of oil spilled has not been determined and contractors will assess the exposed pipeline on Monday, spokesman Brian Quinn said in an email.

Temperatures in the St Louis area dropped more than 10 degrees Fahrenheit below average levels over the weekend, data from weather-forecaster AccuWeather showed.

TransCanada said personnel working on the cleanup of the spill affirm that the released product is controlled and there is no threat to public safety.

Both TransCanada and Enbridge Inc shut their lines in the St Louis area last week as officials investigated the source of the leak.

Enbridge said on Monday its Platte crude pipeline resumed normal operations on Friday evening.

Reporting by Devika Krishna Kumar in New York; Editing by David Gregorio and Matthew Lewis