In November of 2017, TransCanada had to shut down the Keystone pipeline after a spill in South Dakota. They were ordered to operate at a reduced pressure later that month. The restriction was only limited to a small part of the pipeline that links Alberta’s oil sands to US refineries.
As of December 1, pressure restrictions were in place from the pipeline’s Luverne pump station to Ludden pump station and on the segment that had the leak. Reduce flows on the Keystone pipeline helped drawn down inventories in the Cushing, Oklahoma storage hub.
On April 3rd, 2018 TransCanada requested that the remaining pressure restrictions on the Keystone pipeline be lifted and the PHMSA approved the request.
In early May 2018, pressure restrictions on TransCanada Keystone pipeline were lifted by the US pipeline safety regulators.
Returning to full capacity on the pipeline is expected to help relieve a bottleneck in Alberta caused by an increased in production with a shortage of pipeline and rail capacity.
A glut of oil has overwhelmed pipeline access markets and contributed to big differences between bitumen-blend Western Canadian Select oil and West Texas Intermediate oil. The price of Western Canadian Select oil went from highs of about US$30 to US$17 per barrel and has caused a series of maintenance shutdowns at oil sand producing facilities that had to reduce production.
The lower prices have led some companies to produce less heavy oil in the first quarter, while companies such as Husky Energy Inc. started buying heavy oil for use in its refineries because it was cheaper than producing its own oil.
Paul Miller, TransCanada’s head of liquids, said in a conference that there wouldn’t be a big increase in their throughput once the ban is lifted based on some changes they have already made. This means that the lift would be a minor input on TransCanada’s throughput.
TransCanada has been moving historical volumes with drag-reducing agents and the lift will make it easier for TransCanada to operate.
What do you think about the restriction lift? Let us know in the comments below.