Canadian oil rises after spill closes diluent pipeline in Alberta

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Heavy Canadian crude rose after a spill shut down a pipeline that feeds by diluting two major oil sands sites in Alberta.Following the leak on Saturday morning, Inter Pipeline Ltd. closed the western segment of its Polaris system at 240,000 barrels per day. The thinner supplied by Polaris to sites operated by Imperial Oil of Exxon Mobil Corp. and by Husky Energy Inc. is mixed with the sticky bitumen they produce, so that it can be shipped by pipeline.

The Western Canadian Select benchmark for October delivery rose 2.9% to US $ 33.53 per barrel on Tuesday, reducing its discount at West Texas Intermediate to US $ 9.85, the first time that the spread has fallen below US $ 10 since Aug. 17, according to data from NE2 Group. .

There is still no estimate for a restart of the affected segment of the Polaris system and no update was expected on Tuesday, Inter Pipeline said. The eastern section of the pipeline, which feeds some other oil sands operations, is fully operational.

Husky, operator of the Sunrise site, was affected by the pipeline shutdown, “however, we have other options to help mitigate the effects,” said spokesperson Dawn Delaney.

Imperial said it is assessing the impact of the pipeline shutdown on its Kearl heavy crude mine. Kearl’s cogeneration power readings were zero Tuesday, according to data from the Alberta Electric System Operator.

Inter Pipeline is working to dig the line, said Shawn Roth, a spokesperson for the Alberta Energy Regulator. New dams have been deployed and wildlife containment measures have been taken. The site is difficult to access but a helicopter and vehicles have arrived on site, he said.



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