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08 Mar 2024

TC Energy's Keystone Oil Pipeline Restarts After Going Offline

08 Mar 2024  by reuters   

The route of the Keystone XL crude oil pipeline lies idle through a farmer's field near Oyen, Alberta, Canada February 1, 2021. REUTERS/Todd Korol/File Photo Purchase Licensing Rights
TC Energy's (TRP.TO), opens new tab Keystone oil pipeline resumed service on Thursday after going offline and temporarily restricting a major conduit of Canadian oil to the United States, which sent oil prices higher.

The 622,000 barrel-per-day pipeline has been dogged by problems, including a 2022 spill in rural Kansas.

TC said in a statement late afternoon that Keystone was safely operating after briefly suspending service as a precautionary measure.

The Calgary, Alberta-based company said it had confirmed the pipeline's integrity and no oil was released.

Earlier, TC notified shippers of the outage, citing operational issues but not offering specifics, one industry source said. The company did not say how much of the Keystone network was down or for how long.

U.S. West Texas Intermediate oil turned positive after the trading session closed. When trading resumed, crude was up 0.4% at $79.22 per barrel.

"With Keystone, we're seeing a pattern of these sporadic outages," said Rory Johnston, founder of the Commodity Context newsletter. "Western Canada is so often operating on a knife’s edge of crude egress capability."

Keystone, stretching 4,850 km (3,000 miles), transports oil from Alberta to Nebraska, where it splits, with one arm running east to the Midwest and the other running south to the U.S. crude storage hub in Cushing, Oklahoma, and to the Gulf, where it is processed by refiners or exported.

Last month, executive vice-president of liquids Bevin Wirzba told analysts on a quarterly call that TC had inspected 80% of the Keystone system during the year since the Kansas spill and found no potential issues with the pipeline's integrity.

The main alternative to Keystone is Enbridge's (ENB.TO), opens new tab Mainline, which is running in March at 25% apportionment for light oil and 20% apportionment for heavy oil.

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