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Keystone spill coincided with test of higher flows

  • Market: Crude oil
  • 16/12/22

Segments of TC Energy's 622,000 b/d Keystone crude pipeline that remain shut following a leak were undergoing a test at the time of the accident, where flows were increased by up to 16pc.

While there has been no indication from the company or regulators to the cause of the breach, which spilled 14,000 bl of crude into a rural Kansas creek, the timing of the increased flows are likely to be an issue investigators look at.

TC Energy in November began "testing" the Keystone line, which was to temporarily increase rates to 720,000 b/d over a two-month period. The purpose of the exercise was to evaluate operational performance and reliability of the system, the Calgary-based company said in October.

Since 2017, TC Energy already had the green light to operate Keystone at a higher pressure than any other crude pipeline in the US, due in part to the higher quality steel used during construction, according to a 2021 report from the US Government Accountability Office. This allowed for thinner but stronger pipeline walls. TC Energy said this would also cut steel costs by about 10pc.

In 2007 TC Energy, then known as TransCanada, received a special waiver from the Pipeline and Hazardous Materials Safety Administration (PHMSA) to run Keystone at 80pc of its Specified Minimum Yield Strength (SMYS). This is higher than the 72pc maximum operating pressure described in PHMSA regulations.

But PHMSA did not allow Keystone to operate at this higher pressure until 2017, when TC Energy had replaced portions of pipeline that were affected by industry-wide issues.

No other pipeline in the US has applied for or received the same special permit.

The waiver only allows the higher pressure at sections of the line that are not considered to be a "high consequence areas," which includes near pumping stations, highly populated areas or areas that are unusually sensitive to environmental damage.

But the higher pressure allowed by the special permit was not determined to be a root cause of past Keystone spills greater than 50 bl, according to PHMSA in 2021, but rather a consequence of either the original design, flaws in the manufacturing of pipe or construction issues.

PHMSA said in its 8 December corrective order following the current spill that when the line does restart, the affected portion of Keystone must not exceed 80pc of the pressure it was operating at "immediately prior" to the 7 December failure. The affected segment is a 96-mile stretch south of Steele City, Nebraska.

TC Energy must also satisfy a number of other requirements, including the submission of a remedial work plan within 90 days from the date of PHMSA's corrective order.

A total of 4,125 bl of oil has been recovered from the spill side as of 15 December, TC Energy said today, about 1,100 bl more than the day before.

Over 400 personnel were at the scene on 14 December according to the Environmental Protection Agency, which also reported four dead mammals and 71 dead fish in the area.


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