Thu Aug 13, 2015 5:14pm EDT
Spearhead oil pipeline restart date still unknown: Enbridge
The restart date Enbridge Inc's 193,300 barrel per day Spearhead crude pipeline remained unknown, the company said on Thursday afternoon, a day after the adjacent Flanagan South pipeline was put into service.
Canadian cash crude prices strengthened on news that the 600,000 bpd Flanagan South pipeline, also known as Line 59, was brought back into service on Wednesday evening. On Thursday, Enbridge confirmed in an email that it had reopened Flanagan South, and said the return to service for Spearhead, or Line 55, was still unknown.
The company said in a letter to shippers that it did not expect any long-term impacts to the Flanagan South delivery schedule.
The two pipelines, which run from Illinois to the oil storage hub of Cushing, Oklahoma, were closed on Tuesday after a crude spill of about one barrel was found in Shelby County, Missouri.
The outages stemmed the flow of some 800,000 barrels per day of Canadian crude, causing cash prices to dive on Wednesday the furthest below the West Texas Intermediate benchmark in more than a year. [CRU/CAN]
News of Flanagan's return strengthened Canadian cash markets quickly, with Western Canadian Select last trading on Thursday at $19.30 a barrel below the U.S. crude benchmark. On Wednesday morning, it traded as weak as $21.75 a barrel under the WTI benchmark.
While Canadian differentials strengthened, they remain subdued because of the ongoing and unrelated issue at BP Plc's Whiting refinery in Indiana, a major consumer of heavy Canada crude.
But, Canadian crude prices may remain under pressure. Traders who ship on the highly subscribed Spearhead pipeline will either need to store their oil, sell it to another refinery or keep it in Alberta if they cannot bring it to Cushing, dealers said. Those risks will remain until the pipe is restarted, trading sources said.
The excavation of Spearhead Pipeline is complete and the investigation into the cause of the spill continues, the company said in the shipper notice.