Shutdown of Texas Pipeline Boosting Oil Prices

By Dan Molinski

The rupture and closure of a major crude oil pipeline in Texas jointly-owned by Enterprise Products Partners (EPD) and Enbridge Inc. (ENB) helped to push oil prices higher Tuesday as crews worked to clean up the spill.

The 30-inch diameter Seaway S-1 pipeline pumps up to 400,000 barrels a day of crude oil from a commercial hub in Cushing, Okla. to refineries 500 miles away near the Gulf Coast. A road crew working with the Texas Department of Transportation punctured the high-pressure line Monday afternoon northeast of Dallas, creating a gusher that sprayed oil all over a highway.

Rick Rainey, a spokesman for Enterprise, said Tuesday the cleanup process has begun. Two nearby businesses, a gun shop and a gas station, have re-opened after being evacuated Monday, he said.

It is unclear how much oil was spilled, or when pumping may resume, Mr. Rainey said.

Oil traders in New York said the pipeline's closure created some supply concerns, helping to push oil prices 2% higher in early trading to nearly $54 a barrel.

State Highway 121 is likely to remain closed in both directions until Tuesday afternoon as crews wipe up the oil-caked roadway, said a dispatcher with the Collin County Sheriff's Department. The incident happened near the town of Trenton.

The pipeline is operated by Seaway Crude Pipeline Company, a 50/50 joint venture between Houston-based Enterprise and Canadian firm Enbridge.

Mr. Rainey said there are certain barriers and other safeguards in place that aim to prevent third-party workers and others from rupturing the pipeline, and said an investigation into the incident has begun.

Write to Dan Molinski at [e-mail]

(END) Dow Jones Newswires

January 31, 2017 11:34 ET (16:34 GMT)

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