(Bloomberg) – Excavations were carried out on the Keystone Pipeline oil spill, as staff had to clean up the sludge on site.
Heavy equipment has been moved to the site where the leak Tuesday swept 3,500 barrels of oil in remote areas of the state, but the excavation cannot begin until the mixture of crude oil and water is removed. The excavations expected to begin on Thursday are the first step in repairing the pipeline system that Canadian oil transports to the U.S. market.
South Bow Corp.’s Keystone conduit can transport more than 620,000 barrels of crude oil from Alberta to refineries in the Midwest and Gulf Coast every day. The line has been closed since the leak on Tuesday, usually accounting for 15% of U.S. Canadian oil exports. Canada is the largest foreign crude oil supplier in the United States, sending about 4 million barrels to its southern neighbors a day.
Since Canadian inventory is low, Canada’s heavy crude oil prices have been high, with maintenance efforts abandoned by oil reducing some output and additional transport capacity on other pipeline systems.
Western Canada’s choice crude oil from $9.80 on Thursday was sold at $10 a barrel in the mid-range discount for the U.S. benchmark West Texas, according to a person familiar with price and general index data compiled by Bloomberg. Over the past two years, the discount averaged around $15.
Enbridge Inc., Canada’s largest oil pipeline export system operator, had no ration space this month, while the expanded Trans Mountain Pipeline sent record crude oil from the marine terminal near Vancouver last month.
“While our mainline usually runs in capacity, there is some flexibility this month due to seasonal maintenance activities between customers,” Enbridge said in an email. “This allows us to accommodate shippers seeking shipping on the system due to a cornerstone leak.”
According to a statement from the Pipeline and Hazardous Materials Safety Administration, Nangong has promised not to restart the pipeline without prior approval from the U.S. government. In total, 910 barrels have been recycled, and PHMSA dispatched eight inspectors to investigate the cause of the leak, the agency said.
(Increase the Canadian oil price to fourth, paragraph 5.)
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