Keystone pipeline shut after oil spills into Kansas creek - Reuters

BENGALURU/WINNIPEG, Dec 8 (Reuters) - Canada's TC Energy said connected Thursday it had unopen its elephantine Keystone pipeline aft an lipid spill into a Kansas creek, and it was unclear however agelong the closure would last.

The size of the leak, which occurred astir 20 miles southbound of a cardinal junction successful Steele City, Nebraska, is presently unknown.

The 622,000 barrel-per-day Keystone enactment is the superior artery shipping dense Canadian crude from Alberta to refiners successful the U.S. Midwest and the Gulf Coast.

U.S. Pipeline And Hazardous Materials Safety Administration (PHMSA) unit are investigating the leak, which occurred adjacent Washington, Kansas, a municipality of astir 1,000 people.

Keystone unopen the enactment astatine astir 8 p.m. CT Wednesday (0200 GMT Thursday) aft alarms went disconnected and strategy unit dropped, TC (TRP.TO) said successful a release. It said booms were being utilized to incorporate the creek.

"The strategy remains unopen down arsenic our crews actively respond and enactment to incorporate and retrieve the oil," the merchandise said.

Two Keystone shippers said TC had not yet notified them however agelong the pipeline whitethorn beryllium shut. The institution did not remark further. TC shares fell 0.6% successful Toronto connected Thursday.

Keystone's shutdown is expected to hamper deliveries of Canadian crude some to the U.S. retention hub successful Cushing, Oklahoma and to the Gulf, wherever it is processed by refiners oregon exported.

The shutdown is expected to widen the discount connected Western Canada Select (WCS) dense lipid from Alberta to U.S. crude , which was already anemic owed to lackluster request for heavy, sour Canadian oil.

WCS dense blend crude for January transportation successful Hardisty, Alberta, settled astatine astir a $26-per-barrel discount to U.S. West Texas Intermediate (WTI) connected Wednesday.

"It's truly a worst-case script if this outage is long-lasting," said Rory Johnston, laminitis of vigor newsletter Commodity Context, noting that if the terms falls further, shippers whitethorn opt to determination crude by rail.

Steele City is astir the junction wherever Keystone splits, with 1 conception moving crude to Illinois refineries and the different carrying lipid southbound to Oklahoma and the Gulf Coast.

If the spill is located southbound of the junction, TC whitethorn beryllium capable to rapidly restart the conception to Illinois, RBC expert Robert Kwan said successful a note.

Past shutdowns person mostly lasted astir 2 weeks, but this could past longer arsenic it involves a h2o body, Kwan said.

There person been 7 spills connected Keystone since it became operational successful June 2010, according to PHMSA data. The largest were successful December 2017, erstwhile much than 6,600 barrels spilled successful South Dakota, and successful November 2019, erstwhile much than 4,500 barrels spilled successful North Dakota, according to PHMSA.

On Nov. 15, TC announced it would curtail volumes connected the pipeline owed to immoderate terrible weather-related incidents, without specifying the size oregon duration of the curbs.

Reporting by Arpan Varghese, Brijesh Patel successful Bengaluru, Rod Nickel and Arathy Somasekhar; editing by Toby Chopra, Jason Neely, David Evans and Alexander Smith

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