PHMSA reverses order, lets TransCanada restart Keystone line

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, June 6 -- Just a day after ordering a TransCanada Corp. subsidiary to make necessary repairs and address safety issues arising from leaks last month along the Keystone oil pipeline, the US Pipeline and Hazardous Materials Safety Administration gave TransCanada Oil Pipeline Operations Inc. permission on June 4 to restart the system.

Approval to restart the pipeline came after TCOPO submitted metallurgical testing results of the failed pipe components and satisfied the US Department of Transportation agency that necessary repairs were made and all immediate safety issues were addressed, PHMSA Central Region Director David Barrett said in a letter to Vern Meier, vice-president of TransCanada’s US pipeline operations. He authorized a daylight restart no sooner than June 5 under restricted conditions and close monitoring by PHMSA.

TransCanada employees worked around the clock to take all necessary actions to allow the pipeline to resume safe operations, TransCanada Chief Executive Russ Girling said on June 5. He confirmed that PHMSA would closely monitor the line’s operation.

“Almost all of the oil releases over the last 11 months on Keystone have been minor, averaging just 5-10 gal of oil,” Girling said, adding, “The vast majority of that oil was confined to our property and in all cases was cleaned up quickly. None of the incidents involved the pipe in the ground; the integrity of Keystone is sound.”

American Petroleum Institute Executive Vice-Pres. Marty Durbin said on June 6, “What we’ve seen over the last several weeks has proven we have an effective regulatory process, and that TransCanada has the resources to shut the pipeline down within minutes, work with PHMSA to determine the steps needed to make the regulator feel comfortable with restarting the pipeline, and improve the operation moving forward.”

Durbin added, “I expect this to facilitate the approval of the Keystone XL pipeline,” he said in a teleconference with reporters about API submitting comments to the US Department of State supporting TransCanada’s proposed Keystone XL project. Keystone XL would greatly increase capacity to transport oil from Alberta’s oil sands to US refineries, including several along the Gulf Coast. “This is the way the process should work,” he said.

The June 3 corrective action order PHMSA sent to TCOPO followed investigations by the agency of two leaks during May in North Dakota and Kansas from small-diameter pump station fittings along the company’s Keystone line. The 1,316-mile system extends from the US-Canadian border in North Dakota to Patoka, Ill., and includes an extension from Jefferson County, Neb., to Cushing, Okla., the US DOT agency’s Pipeline Safety Office said.

The order required TCOPO to take corrective actions in response to a May 7 incident at the pipeline’s Ludden pump station in Sargent County, ND, where 400 bbl of crude leaked, and a May 29 incident at the line’s Severance pump station in Doniphan County, Kan., where 10 bbl of crude was released.

PHMSA told TransCanada to perform metallurgical testing and root cause failure analysis, review other parts of the pipeline system for concerns similar to those involved in the recent failures, make permanent repairs, and continue ongoing monitoring, in addition to conducting immediate repairs and tests.

Opponents immediately said PHMSA’s order showed that TransCanada can’t manage its existing system and should not be allowed to build more capacity. “The State Department needs to give US pipeline regulators at [DOT] time to sort out what has gone so horribly wrong with Keystone before moving forward with Keystone XL,” Anthony Swift, an attorney at the Natural Resources Defense Council’s International Program, said in a June 3 posting at his blog. “The history of Keystone has shown that these pipelines are dangerous. State shouldn’t fast-track the review of Keystone XL until we know how they can be built and operated safely.”

PHMSA investigators found that cyclical fatigue was responsible for both leaks. TransCanada performed a metallurgical analysis in each case.

A third leak occurred May 25 at a third pump station along the pipeline, which did not meet reportable criteria, and that preliminary analysis by TransCanada found that a transmitter fitting failed due to cyclical fatigue, the order said.

Girling said in the Ludden and Severance pump station incidents, TransCanada’s monitoring system functioned as designed and detected a pressure drop quickly. TCOPO reacted by remotely closing valves on the pipeline, shutting down the entire system in minutes, and stopping the flow oil, he indicated.

TCOPO improved the system by modifying or replacing all appropriate fittings at US and Canadian pump stations, the TransCanada chief executive continued. Teams were on-site at certain pump stations to facilitate a safe restart, and additional tests along the pipeline’s length were conducted to ensure its integrity, he noted. Flows will be ramped up gradually in the coming days and TransCanada should be able to move all volumes nominated by the system’s customers for June, Girling said.

Contact Nick Snow at nicks@pennwell.com.

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