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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Keystone Force Majeure Cuts Oil Flows To U.S.

  • TC Energy, the operator of the Keystone Pipeline, declared force majeure on Monday.
  • The operator cited a power outage in South Dakota as the main reason for the force majeure status.
  • The company did not provide a timeline for restoring crude flows to full capacity.

TC Energy, the operator of the Keystone Pipeline, declared force majeure on Monday following a power outage in South Dakota, which reduced the flows on the link carrying crude from Canada to the U.S.

TC Energy said in a statement late on Monday that it was made aware of a non-operational incident resulting from third-party damage to the power supply to a facility on the Keystone Pipeline System near Huron, South Dakota. The system continues to operate safely, but it is operating at a reduced rate due to damage to the third-party power utility.

“Initial damage assessments have been completed with no material impact to TC Energy owned facilities,” the company said.

As a result of the power outage, TC Energy declared force majeure on the Keystone Pipeline, but did not provide a timeline for restoring crude flows to full capacity.   

“Repairs are being undertaken and we are working to restore full service as soon as possible. A timeline for full-service restoration is not available at this time,” the company said.

The 2,687-mile Keystone Pipeline System plays a key role in connecting Alberta’s crude oil supplies to U.S. refining markets in Illinois, Oklahoma, and Texas, as well as connecting U.S. crude oil supplies from the Cushing, Oklahoma, hub to refining markets in the U.S. Gulf Coast through the Marketlink Pipeline System.

The reduced flows of crude from Canada to the United States comes days after U.S. President Joe Biden returned from his trip to the Middle Eastern without receiving a specific commitment from the top OPEC producers to boost oil supply in the near term.

Meanwhile, gasoline prices in the U.S. continued to fall for a fifth consecutive week, to a national average of $4.51 per gallon as of July 18, according to data compiled by fuel-savings app GasBuddy. 

“Barring major hurricanes, outages or unexpected disruptions, I forecast the national average to fall to $3.99/gal by mid-August,” said Patrick De Haan, head of petroleum analysis at GasBuddy.

In the past three days, South Carolina and Texas became the first two states to see state average gasoline prices return to below $4 per gallon, according to GasBuddy.

By Tsvetana Paraskova for Oilprice.com

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  • Gas User on July 23 2022 said:
    Gas is currently $3.40 a gallon in Texas.

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