Keystone Partial Restart Delayed, Timeline in Flux

Crews work on a right of way for the Keystone XL pipeline
Crews work on a right of way for the Keystone XL pipeline near Oyen, Alberta, Canada in 2021. (Jason Franson/Bloomberg News)

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TC Energy’s efforts to restart a segment of its Keystone oil pipeline after a 14,000-barrel spill have been delayed by bad weather, according to people familiar with the matter.

The company’s latest estimate for resuming service on a leg of the pipeline extending to Patoka, Ill., is Dec. 14, said the people, who asked not to be identified discussing confidential matters. TC Energy initially planned a partial restart Dec. 10, but rain and the rupture’s proximity to a waterway made excavation of the pipeline more difficult. The timeline is subject to change, but the company is still aiming for a full restart on Dec. 20.

Calgary-based TC Energy said in an email it has not “confirmed a timeline for the re-start.”

Keystone, which delivers up to 600,000 barrels a day of heavy Canadian crude into the U.S. Midwest, was shut the night of Dec. 7 after a spill that is poised to be the largest in the pipeline’s history, and one of the worst in the U.S. since 2010. Including the latest rupture, Keystone has leaked almost 26,000 barrels of crude since it was built 12 years ago, the most of any U.S. pipeline during that timeframe, Pipeline and Hazardous Materials Safety Administration data show.

TC Energy can’t resume operations on the ruptured segment until federal regulators approve its restart plan. As of Dec. 12, the company had not submitted one, said PHMSA. If the line resumes service as planned by Dec. 20, this would be one of the longest outages in the pipeline’s history.



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The market is anxiously awaiting details on the duration of the shutdown. News of the restart timeline Dec. 13 offered a bearish signal in an otherwise bullish oil market. U.S. benchmark futures pared gains, while West Texas Intermediate’s prompt spread — the price difference between oil for January and February delivery — flipped back into a market structure that signals ample supply after earlier indicating scarcity.

So far, the shutdown has limited supplies of Canadian crude to the U.S. Gulf Coast. The Marketlink pipeline, which transports supplies from Keystone to the Gulf, has already informed customers about cuts in flows for December and January, according to people familiar with the matter.

The spill hasn’t contaminated any drinking water wells, according to the Environmental Protection Agency. Although the pipeline has spewed oil into Mill Creek, which connects to the Little Blue River, the latter wasn’t impacted because of containment efforts, said Kellen Ashford, the agency spokesperson for region 7.

So far, fewer than 2,600 barrels of oil have been recovered — including 2,163 barrels of an oil-water mixture from Mill Creek and 435 of crude directly from the pipeline, the EPA said in a statement. Currently, there is no timeline for clean-up to be completed.

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