Canada’s Energy Board Studying Keystone Pipe and Fittings

Canada’s National Energy Board is investigating whether some steel pipe and fittings on TransCanada Corp. (TRP)’s Keystone oil pipeline are below standards.

The board began the work after its U.S. counterpart, the Pipeline and Hazardous Materials Safety Administration, started a similar study, Rebecca Taylor, a spokeswoman for the Canadian regulator, said yesterday in a phone interview.

“They noticed that fittings were not meeting their standards down in the States,” Taylor said, without providing more details. The Canadian investigation will include whether improvements to materials standards are needed, she said, and there is no targeted completion date.

TransCanada, based in Calgary, delivers crude from Alberta’s oil sands on its 2,639-mile (4,247-kilometer) Keystone system to U.S. Midwest and Gulf Coast markets. The company is seeking approval from President Barack Obama to build the northern cross-border leg of its Keystone XL line, a $5.4 billion project that environmental groups oppose, saying it will worsen climate change.

“We are responding to questions from the NEB about pipeline fittings and steel pipe used for Keystone,” Shawn Howard, a TransCanada spokesman, said in an e-mail. “It is important to note that there is no issue with the safety or integrity of this pipeline.”

Keystone has safely delivered more than 560 million barrels of oil since 2010, he said.

The National Energy Board mentioned the investigation in a report on its audit of TransCanada’s integrity management programs. The pipe and valve investigation preceded the audit, which began in November 2012, Taylor said.

Damon Hill, a spokesman for the Pipeline and Hazardous Materials Safety Administration, didn’t immediately return an e-mail seeking comment after normal business hours yesterday.

To contact the reporter on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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