Enbridge Allowed to Start Midwest Oil Pipeline by End of Week, U.S. Says

Enbridge Energy Partners LP will be allowed to restart a key oil pipeline supplying the U.S. Midwest by the end of the week, following the repair of a rupture, a federal official said.

Enbridge has already submitted a restart plan, said Carl Griffis, Chicago-area senior engineer from the Pipeline and Hazardous Materials Safety Administration, who was on the scene of the leak in Romeoville, Illinois. The government doesn’t see any “systemic problems” with the pipeline, Griffis said in an interview late yesterday.

Oil futures topped $78 a barrel following the closure of Enbridge’s Line 6A, which can carry 670,000 barrels a day of crude, equal to more than one-third of Midwest imports. Gasoline in the Chicago spot market rose as much as 10 percent after the Sept. 9 closure on speculation that refiners would have to cut output, leading to tighter supply.

Workers for the Houston-based company were welding a replacement section yesterday into the 466-mile line that has been shut for six days after spilling about 6,100 barrels of oil from a section in Romeoville, 30 miles (48 kilometers) southwest of Chicago. The 34-inch line runs from Superior, Wisconsin, to Griffith, Indiana, according to Enbridge’s website.

‘Up and Running’

“It should be up and running in some form or fashion by the end of the week,” said Griffis. “We are looking at the cause at this point in time, we don’t see don’t see any reason to keep the line down while we investigate.”

Enbridge yesterday restarted a 70,000-barrel-a-day link from Ontario to Kiantone, New York, shut earlier to investigate a possible leak. The unit of Calgary-based Enbridge Inc. still has to meet certain PHMSA requirements before it can restart the 190,000 barrel-a-day Line 6B oil pipeline in Michigan, which was halted in July after a rupture.

Crude for October delivery fell 64 cents, or 0.8 percent, to $76.16 a barrel at 9:28 a.m. in London in electronic trading on the New York Mercantile Exchange. The discount of October contract to November futures widened 1 cent to $1.04 a barrel, after narrowing to 84 cents this week.

Enbridge shipped some heavy crude that was designated to run on Line 6A over Line 14 instead, Glenn Herchak, a company spokesman, said yesterday in a telephone interview.

Federal regulators investigating the cause of the 6A leak took custody of the damaged area of the pipe. A 12-foot section of pipe has been loaded on a truck bound for Washington, D.C., said Matthew Nicholson, an investigator at the site from the National Transportation Safety Board.

Congressional Hearing

Enbridge Inc. Chief Executive Officer Patrick Daniel is expected to testify at a congressional hearing on the July spill in Michigan from the 6B line, the U.S. House Transportation and Infrastructure Committee said. The hearing will also examine the oil spill from the 6A line in Romeoville, Illinois, the committee said in a statement on its website.

Citgo Petroleum Corp. said on Sept. 10 that it’s seeking other supplies for its 170,500-barrel-a-day Lemont refinery that gets crude through the pipeline. The plant expects to keep running at planned rates while the pipeline is repaired, a company official said yesterday.

Marathon Oil Corp. has made adjustments to supply routes feeding its Midwest plants, said Shane Pochard, a company spokesman. Marathon imported 6.11 million barrels oil from Canada in June, according to the Energy Department.

The Line 6A leak is the second in as many months on Enbridge’s Lakehead System. Total deliveries on the system averaged 1.62 million barrels a day in 2008, meeting approximately 72 percent of Minnesota refinery capacity, 64 percent of the greater Chicago area, and 68 percent of Ontario’s, according to a company website.

No Corrective Action

Enbridge didn’t receive a “corrective action” order from PHMSA for Line 6A, which would have required the company to meet certain requirements before restarting the line.

“When deciding to place a pipeline under a Corrective Action Order, PHMSA analyzes certain factors to determine if the pipeline poses an immediate threat to life, property, or the environment,” Damon Hill, a spokesman for the agency, said in an e-mail. “Line 6A did not meet the criteria.”

Enbridge shut its Line 6B crude pipe in Michigan and isn’t able to restart until it meets requirements that form part of a “corrective action” order from the regulator.

The company has completed all the required testing for Line 6B, according to Terri Larson, a spokeswoman for Enbridge. “There has been a continuing discussion with the folks at PHMSA and hopefully we will hear soon as to when we might be able to restart.”

Restart Plan

“PHMSA will make a decision on the restart plan when we are confident all concerns have been satisfied to ensure safety,” Hill said.

ConocoPhillips’ Wood River plant and Exxon Mobil Corp.’s Joliet refinery in Illinois, along with BP Plc’s Whiting plant in Indiana, are also located in the vicinity of the pipeline.

Crews worked yesterday to attach the second side of a 12- foot replacement section on Line 6A, according to Gina Jordan, a company spokeswoman. Upon completion, crews will X-ray the section to test the welds, she said.

“Obviously this is a critical situation, all eyes are on Enbridge,” said Griffis. “Public safety comes first no matter what.”

To contact the reporters on this story: Mario Parker in Chicago at mparker22@bloomberg.net; Paul Burkhardt in New York at pburkhardt@bloomberg.net

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