TransCanada Temporarily Shuts Keystone Pipeline

By Maria Fisher, Associated Press

19 October 12

ransCanada Corp. has temporarily shut down its existing 2,100-mile Keystone pipeline after tests showed possible safety issues, a federal agency said Thursday.

Jeannie Layson, spokeswoman for the Pipeline and Hazardous Materials Safety Administration, which oversees pipelines in the U.S., said no leaks were detected on the line, which moves on average about 500,000 barrels of crude a day from Alberta, Canada, down through several states to facilities Illinois and Oklahoma.

"TransCanada reported to the Pipeline and Hazardous Materials Safety Administration that they have shut down their existing Keystone system pipeline to make repairs in areas where required integrity tests identified possible safety issues," Layson said in an email.

She said the possible problems were located on the stretch of pipeline that extends between Missouri and Illinois.

A federal inspector was deployed to review test results, observe repairs and monitor any additional necessary safety issues, Layson said. PHMSA did not have additional details on what the possible safety issues were.

Grady Semmens, spokesman for Calgary-based TransCanada, said the pipeline was shut down Wednesday evening as a precaution and was expected to restart Saturday.

"We found a small anomaly on the outside of the pipe after analyzing the data from an in-line inspection tool," Semmens said in an email. "As a precaution, we've shut down the line so we can go in and take a closer look."

Once the pipeline is restarted the company expects "normal operations and flows" for the rest of October, but TransCanada may have to "make up some volumes in November," Semmens said.

Heavy storms that have hit the area recently "are not helping" the operation, he said.

"But we have crews on site and will be doing excavation work to expose the pipeline so we can investigate the feature that was identified by the in-line inspection," Semmens said.

The Keystone pipeline has been moving crude to facilities in Wood River and Patoka, Ill., since 2010 and to sites in Cushing, Okla., since February 2011, according to the company's website.

One oil analyst said the Keystone suspension should not have any impact on U.S. gasoline prices. But "it may put pipeline safety and the environmental hazards that come with transporting petroleum back on the map for a while, Tom Kloza, chief oil analyst at the Oil Price Information Service, said in an email.

The shutdown comes amid delays over TransCanada's plans to build another $7 billion section of pipeline called the Keystone XL that would transport heavy tar-sands crude oil from Canada to Texas' Gulf Coast refineries.

Pipeline opponents argue the project is unsafe because it would be carrying heavy, acidic crude oil that could more easily corrode a metal pipe, which would lead to a spill. They also say refining the oil would further contaminate the air in a region that has long struggled with pollution.

TransCanada says its pipeline would be the safest ever built, and that the crude is no dirtier than oil currently arriving from Venezuela or parts of California.

President Barack Obama rejected TransCanada's original application for a federal permit to build the pipeline in January by after congressional Republicans imposed a deadline for approval that didn't allow enough time to address questions about the route through Nebraska.

Since then, TransCanada has split the project into two pieces. The company has started construction on the southern section of the pipeline between Oklahoma and the Gulf Coast.