Enterprise 'Still Investigating' Cause of Oil Pipeline Spill

   By Dan Molinski 
 

Enterprise Products Partners (EPD) said Wednesday it doesn't know when it will restart a major pipeline it shut three days ago due to a spill in Oklahoma, and doesn't know what caused the spill.

The Legacy pipeline, operated by Houston-based Enterprise in a joint venture with Canada's Enbridge Inc. (ENB), sends up to 400,000 barrels of crude oil each day from a hub in Cushing, Okla., to refineries along the Gulf Coast, some 500 miles away. It was forced to halt pumping Sunday night when an oil spill was discovered near the start of the line, in an industrial section of the town of Cushing.

"We are still investigating the cause of the incident," Rick Rainey a spokesman for Enterprise, told The Wall Street Journal in an email. "Clean-up of the site continues to progress well, which has allowed us to get a better look at the pipe and gather information that we can use to determine the best path forward."

Mr. Rainey said Enterprise is working closely with regulators "to develop a repair plan."

Oil analysts at Baird began speculating Wednesday as to the cause of the spill, given the sparse details released so far.

"Since this is a new pipeline we're curious about why the release happened at all, if not by construction accident or outside party," Baird said in a research note.

The exact amount of oil spilled is unknown, although Enterprise said it was significantly less than the damaged section's 50,000-barrel capacity. It said all the spilled crude was contained in a retention pond at Enbridge's facility.

Market analysts initially said the pipeline's closure could hurt oil prices as supplies were likely to back up in Cushing. But the shutdown's impact on prices appears to be limited so far. The Nymex December contract for crude oil was recently trading 1% lower at $49.46 a barrel.

The Legacy pipeline spill and shutdown comes one month after a major gasoline pipeline run by Colonial Pipeline Co. had to halt pumping for a couple of weeks due to a spill in Alabama.

Write to Dan Molinski at [e-mail]

(END) Dow Jones Newswires

October 26, 2016 12:40 ET (16:40 GMT)

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