Plains Rainbow Pipe May Be Shut Days or ‘Longer,’ ERCB Says

A section of Plains Midstream Canada LP’s Rainbow pipeline in northern Alberta, which was shut April 29 after leaking 28,000 barrels of crude, may be out of service for days or longer, according to a regulator.

“We haven’t drawn any conclusions as of yet,” said Davis Sheremata, a spokesman for the Alberta Energy Resources Conservation Board. “That line will not be put back into service until our staff are 100 percent sure it can be operated safely and we are not going to see another leak like this. That could be days or it could be longer.”

The leak was probably a “singular failure and not a systemic problem,” the company said today in statement on its website. The leak has been contained within an area about 0.5 mile (0.8 kilometer) by 150 feet (46 meters), according to the 1 a.m. update.

Plains has completed repairs on the pipeline and has recovered about 1,900 barrels of spilled crude, the company said today in updates on its website. The restart of the 220,000- barrel-a-day pipeline is contingent on regulatory approval.

The Rainbow pipeline ships condensate along with sweet, or low-sulfur oil, and heavy crude, according to Plains’s website.

Trucking Crude

Harvest Operations Corp.’s Red Earth and Hay River conventional oil production operations have been affected by the pipeline outage, said Jeremy Dietz, a spokesman for the trust. Red Earth’s average production in 2010 was 2,800 barrels a day and Hay River had 5,850 barrels a day of output last year.

“We’re using all available trucking and storage options,” he said. “For the month of May we don’t anticipate any reduction in production levels or material impact, assuming the line restarts in the next week.”

Penn West Petroleum Ltd. is trucking crude oil, placing it in storage and using alternative pipelines after the disruption Jason Fleury, a spokesman for Penn West, said in a telephone interview yesterday. The Calgary-based company produces about 100,000 barrels a day of crude in northern Alberta.

“It affects us for sure, but we’ve got options to move crude via other lines, you can truck and we’ve got storage capabilities,” said Fleury. No production has been shut in, he said.

Trucking Changes

EnerMAX Services Inc., a trucking company in Alberta, is moving crude along different routes because of the pipeline disruption, Sean McKelvey, a business development manager at the company, said in a telephone interview yesterday.

Crude that is typically moved south from the Rainbow Lake area to Valleyview, Alberta, is now being moved from the Rainbow Lake area west to Gordondale, Alberta, and the Boundary Lake region along the Alberta-British Columbia border, he said.

A school in Little Buffalo, Alberta, for children in kindergarten through grade 12 was shut for a fourth consecutive day today after students complained of nausea, headaches and dizziness following the leak, Brian Alexander, the principal, said in a telephone interview.

The 500-person Native community was visited by a Plains representative yesterday, he said. The school is about 1.6 miles from the pipeline rupture, according to Alexander.

To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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