TC Energy's Keystone oil pipeline is offline due to operational issues, cutting off a major conduit of Canadian oil to the U.S., four industry sources said on March 7.
The 622,000 bbl/d pipeline has been dogged by problems, including a 2022 spill in rural Kansas.
TC notified shippers of the outage but did not specify the problem or the possible length of the outage, one industry source said. The sources were not authorized to speak publicly.
A spokesperson for Calgary, Alberta-based TC said the company could not immediately comment.
"That's obviously very bad," said Rory Johnston, founder of the Commodity Context newsletter. "With Keystone, we're seeing a pattern of these sporadic outages. 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.
The discount on Western Canada Select heavy crude for April delivery grew modestly to $16/bbl compared to West Texas Intermediate, from $15.75 before the Keystone news, a crude trader said.
The Keystone outage comes as shippers await completion of the Trans Mountain pipeline expansion, which will nearly triple capacity of a line moving oil from Alberta to the British Columbia coast, providing long-awaited relief to Canada's pipeline congestion.
TC shares were slightly higher in Toronto.
Last year, TC said it planned to spin off its liquids business, including Keystone, to focus on transporting natural gas. The company has been selling assets to reduce debt.
Recommended Reading
IGU: Global Liquefaction Capacity Expected to Grow by 75% by 2030
2024-07-02 - The International Gas Union (IGU) expects global liquefaction capacity to reach 700 mtpa by 2030, up 75% from 2023, driven by new FIDs and the start-up of other projects under construction.
Wars Complicate Energy Transition Despite US LNG Security Blanket
2024-06-10 - Analysts with Norway’s Equinor argue that increased levels of geopolitical conflict and outright wars “have made the energy transition more fragmented,” despite U.S. LNG creating an energy security blanket for Europe and elsewhere.
Hedge Funds Retreat from Oil as War Risk Fades: Kemp
2024-04-29 - Hedge funds and other money managers sold the equivalent of 95 MMbbl in the six most important petroleum futures and options contracts over the seven days ending on April 23.
US LNG to Asia Has Lower Emissions Profile than Coal, Rystad Says
2024-06-12 - LNG emissions are up to 50% lower on average than for coal-fired power generation, even when the fuel is shipped over long distances, according to new research from Rystad Energy.
EIA Estimates Declined Rates of Flaring, Venting NatGas in 2023
2024-06-20 - Even as the rates of natural gas venting and flaring fell, according to Energy Information Administration data, another study shows CO2 emissions continued to rise globally.