Heavy crude price spikes following spill shutdown
Heavy Canadian crude rose after a spill led to the shutdown of a pipeline that supplies diluent to two major oil-sands sites in Alberta.
Following the leak Saturday morning, Inter Pipeline Ltd. shut the west segment of its 240,000-barrel-a-day Polaris system. The diluent Polaris supplies to sites operated by Exxon Mobil Corp.’s Imperial Oil and by Husky Energy Inc. is mixed with the sticky bitumen they produce, so that it can be shipped by pipeline.
The Western Canadian Select crude benchmark for October delivery rose 2.9 per cent to $33.53 a barrel on Tuesday, narrowing its discount to West Texas Intermediate to $9.85, the first time the gap fell below $10 since Aug. 17, NE2 Group data show.
There is still no estimate for a restart of the impacted segment of the Polaris system, Inter Pipeline said. The east segment of the pipeline, which supplies some other oil-sands sites, is fully operational.
Husky, operator of the Sunrise oil-sands site, has been affected by the pipeline shutdown, “however, we have other options to help mitigate the effects,” spokeswoman Dawn Delaney said.
Imperial said it’s assessing the impact of the pipeline shutdown on its Kearl heavy-crude mine. Co-generation power readings from Kearl were zero on Tuesday, according to Alberta Electric System Operator data.
Inter Pipeline is working to dig up the line, Shawn Roth, a Alberta Energy Regulator spokesman, said. New booms have been deployed and wildlife containment measures taken. The site is difficult to access but a helicopter and vehicles have reached the location, he said.