Enbridge: no timeline for pipeline restart

Enbridge Inc said on Sunday it does not know yet when it can restart a key segment of its oil pipeline system in the U.S. Midwest, after a deadly vehicle accident in Illinois caused an oil leak and fire, likely squeezing supplies for refiners in the region. The outage of Enbridge's 318,000 barrel a day Line 14/64, which extends to Griffith, Indiana, from Superior, Wisconsin, is also expected to pressure already-weak prices for Canadian crude this week as supplies back up in Alberta, market sources and analysts said. Enbridge, whose pipelines carry the bulk of Canadian oil exports to the United States, shut the line down early Saturday after what Illinois emergency officials described as a two-vehicle collision at an above-ground portion of the line close to a pumping station near the township of New Lenox, Illinois. Two people, including a firefighter, were reported to have been killed and three others were critically injured in the incident. "Line 14/64 remains shut down as the investigation into the incident continues, enabling Enbridge to assess the damage and determine how long it will take to complete the necessary repairs caused by the vehicle collision early Saturday morning," Enbridge spokeswoman Lorraine Little said in an email. At the site on Sunday, about 70 miles southwest of Chicago, emergency officials and police had cordoned off the area and kept all but company and emergency personnel away. The incident occurred in a largely rural area surrounded by low-rise warehouse buildings. It is about one mile from a housing subdivision. About 10 flatbed tractor trailers brought in square wooden polls about 20 feet long to lay over the spill so vehicles could move in the spill area. Enbridge said it did not know yet how much oil had leaked before it closed off the valves on the pipeline. Early estimates by the Illinois Emergency Management Agency ranged between 2,500 gallons and 20,000 gallons. The company's last major oil spill was in the summer of 2010, when more than 20,000 barrels of crude gushed into the Kalamazoo River system in Michigan from another of its pipelines after a rupture. It was shut for more than two months. The overall system, comprising several pipelines, extends to the U.S. Midwest, Midcontinent as well as southern Ontario from Alberta, where most Canadian crude is produced. Overall capacity is more than 2 million barrels a day. Line 14/64's capacity is equal to about 3 percent of total U.S. oil imports. CAPACITY CONSTRAINED Several U.S. Midwest refineries could face tight supplies if the pipeline remains off line for an extended period. Enbridge has one other pipeline that carries oil to Griffith from Superior, the 670,000 barrel a day Line 6A. Canada is the largest foreign supplier of oil to the United States, and prices for its light, synthetic and heavy grades have been heavily discounted this year due to surging production and tight space on Enbridge's system and others. "Any pipeline disruption is never good for Canadian (price) differentials," a crude marketing source said. "The market is already logistically constrained as it is. I expect there to be a lack of liquidity until the severity of the issue is known." Enbridge said it was forced to slow the flow of oil on two of its pipelines running to the Midwest from Canada in response to the 14/64 outage, to prevent tanks filling to capacity in Superior, one of its major storage hubs. The storage hub of Hardisty, Alberta, was 46 percent full on February 24, according to data monitor Genscape. That compares with 48 percent full two weeks earlier and is about midway between highs and lows since the company began tracking Hardisty storage nearly two years ago. Genscape vice-president Abudi Zein said total storage is important, but the market is more affected by the gains and losses at the hub. A build indicates traders are struggling to sell supplies, Zein said.