Flows on Enbridge oil line seen cut until Tuesday

By Reuters
Posted Nov. 26, 2010 at 5:18 p.m.

Enbridge’s 670,000 barrel a day Line 6A oil pipeline in the U.S. Midwest is expected to run at reduced rates until early next week, creating another costly bottleneck for Canadian crude exports, the company said on Friday.

An outage at a power utility’s substation in Illinois forced Enbridge, which has been struggling with numerous outages on its massive oil pipeline system, to reduce flows as electricity to a pumping station got cut off.

The rates are expected to be cut until at least Tuesday, the company said.

Market sources said flows on the pipeline to Griffith, Indiana, from Superior, Wisconsin, have been chopped by about a third from already-reduced volumes.

The power outage occurred on Thursday at Lockport, Illinois, near Chicago.

“We are mitigating the impacts with standby power allowing Lockport deliveries to continue,” Enbridge spokeswoman Jennifer Varey wrote in an email. “Substation repairs are currently estimated to be complete by the morning of November 30, at which time Line 6A will be able to return to pre-incident rates.”

Word of another in a string of recent Enbridge pipeline problems helped limit losses in U.S. crude oil prices on Friday. January oil fell 10 cents to settle at $83.76 a barrel, well above its $82.78 low.

Canada is the largest foreign oil supplier to the United States and Enbridge’s pipelines move the lion’s share of that supply.

The incident happened on the same day that Enbridge restarted the 290,000 barrel a day Line 6B, which was shut for about a week as the company investigated possible problem spots it found during an in-line inspections.

Line 6B, which carries oil to Sarnia, Ontario, from Griffith, was shut down for nine weeks following a rupture and oil spill in Michigan last July.

Varey said the recent 6B shutdown, combined with high requests for capacity among Enbridge’s shippers, have backed up crude on its system, which originates in Alberta.

The company is working with its shippers to “manage” the situation.

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