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U.S. Pipeline Regulator Orders Lower Pressure On Keystone

The Pipeline and Hazardous Materials Safety Administration has ordered TC Energy to reduce the pressure on an additional stretch of over 1,000 miles of the Keystone pipeline, which last year shut down following a spill and only restarted in late December.

According to the watchdog, the lower pressure must remain in place until TC Energy completes a series of corrective actions, involving a review of the results from previous inspections of the pipeline, testing a root cause failure analysis, and an evaluation of the company’s geohazard program.

Per the latest PHMSA order, TYC Energy must maintain pressure along the main line of the system, from Alberta to Illinois, at 72% and it must review the pressure levels on a monthly basis.

This will lead to lower volumes getting transported via the pipeline, Reuters quoted a Credit Suisse analyst as a warning. These lower volumes could affect the price difference between Canadian and U.S. crude, Andrew Kuske also said.

TC Energy shut down the Keystone pipeline in early December following the detection of a leak in Nebraska. The leak was contained within several days, with the pipeline spilling a total of 14,000 barrels of crude into a creek. The Environmental Protection Agency said at the time drinking water in the region had not been affected.

TC Energy received the green light from the Pipeline and Hazardous Materials Safety Administration to restart the shut-down section of the pipeline three weeks later. Work, however, is not over as the regulator wants to make sure a repeat of the accident is as unlikely as possible.

The Keystone Pipeline System stretches over 2,687 miles and is a vital connection between the Alberta oil sands in Canada and U.S. refining markets in Illinois, Oklahoma, and Texas. The system also connects the Cushing, Oklahoma crude oil hub and refineries on the Gulf Coast. It has a daily capacity of 622,000 barrels of crude.

By Charles Kennedy for Oilprice.com

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