© Reuters. FILE PHOTO: Emergency crews work to clean up the largest U.S. crude oil spill in nearly a decade, following the leak at the Keystone pipeline operated by TC Energy in rural Washington County, Kansas, U.S., December 9, 2022. REUTERS/Drone Base/File Photo
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By Nia Williams and Rod Nickel
(Reuters) -Canada’s TC Energy (NYSE:TRP) Corp said it expects to give an update on the Keystone pipeline restart later on Wednesday, a week after the 622,000 barrel-per-day pipeline was shut after leaking oil into a creek in Kansas.
Keystone is a crucial artery shipping Canadian crude south to U.S. refineries and traders have been awaiting news of when it may restart operations. The 14,000-barrel leak was the largest U.S. oil spill in nearly a decade and the clean-up operation could take weeks.
The spill occurred in Washington County, about 20 miles (32 km) south of a key junction in Steele City, Nebraska, where Keystone splits into two legs. Market players have speculated TC may first restart the leg of the pipeline that delivers to Patoka, Illinois, which did not leak.
Bloomberg on Tuesday reported the Patoka leg could restart on Wednesday, citing sources.
“We don’t have a confirmation of a timeline and anticipate an update on re-start today,” TC said in an email.
TC has not notified Washington County of any restart plans, said Randy Hubbard, the county’s emergency management coordinator, around midday local time.
“I would assume that once they make that decision, they would reach out to us,” Hubbard said.
Canadian crude prices have been relatively steady since Keystone shut down because of ample spare capacity in Alberta storage hubs, but the discount on Western Canada Select, the benchmark heavy grade, has started to creep wider as the outage drags on.
WCS for January delivery in Hardisty, Alberta, settled around $29 a barrel below U.S. crude on Tuesday, from a discount of around $27 a barrel before the leak. WCS for December delivery traded at $31.40 a barrel below U.S. crude on Wednesday, according to a Calgary broker. [CRU/CA]
In the short term, more Canadian oil will go into storage, as alternative transportation options are limited, said Matt Murphy, director of energy research at TPH & Co.
Moving crude by rail requires a long lead time and the Enbridge (NYSE:ENB) Inc Mainline system is running at nearly full capacity this month, Murphy added.
The Mainline moves 3.1 million bpd of Canadian crude to refineries in the U.S. Midwest and eastern Canada. Enbridge will ration December deliveries by the most since last winter, according to company data.
Source: Investing.com
