TransCanada excavates damaged part of leaked pipeline: South Dakota official

Energy Reuters

In this Nov. 3, 2015, file photo, the Keystone Steele City pumping station, into which the planned Keystone XL pipeline was to connect to, is seen in Steele City, Neb. TransCanada has quickly filed a new application to build Keystone XL, one of two ... big oil pipelines being given a second chance by President Donald Trump. (AP Photo/Nati Harnik)

TransCanada Corp (TRP) is making progress on cleaning up a 5,000-barrel oil spill from its Keystone pipeline in South Dakota, where a state official said on Monday the company has excavated the damaged section of pipeline.

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Calgary-based TransCanada shut down the 590,000 barrel-per-day pipeline, one of Canada’s main crude export routes, on Nov. 16, due to the leak. Keystone carries crude from Alberta’s oil sands to U.S. refineries.

Brian Walsh, environmental scientist manager with the South Dakota Department of Environment and Natural Resources, said the damaged portion of the pipe had been exposed but he did not know whether repairs had been completed yet.

“It (the cleanup) is going as fast as we would hope, they are working 24 hours a day,” Walsh added.

In its most recent update TransCanada said it has so far cleaned up 1,065 barrels of oil.

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The outage has roiled crude oil prices on both sides of the border as market players anticipated a glut of crude building up in Alberta while inventories fell in the U.S. futures trading hub of Cushing, Oklahoma. [O/R]

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The company did not immediately respond to a request for comment on Monday.

Traders said U.S. benchmark crude CLc1, which jumped as a result of the Keystone shutdown, was falling on Monday on expectations the restart will happen soon.

Meanwhile the discount on Western Canada Select heavy blend crude for December delivery in Hardisty, Alberta, narrowed in thin trade to $17.90 a barrel below U.S. crude, according to Shorcan Energy brokers. On Friday December WCS settled at $21.50 a barrel under the U.S. benchmark.

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