(Updates restart date, details about restart procedures)
NEW YORK, April 8 (Reuters) - TransCanada Corp TRP.TO
expects to restart its Keystone crude pipeline by Saturday, upon
receiving conditional approval from the Pipeline and Hazardous
Materials Safety Administration (PHMSA), the company said in
emailed statement on Friday.
TransCanada said its 590,000 barrel per day pipeline should
be fully operational by end of day Saturday.
As part of the restart, TransCanada will reduce the pressure
on the line to ensure it is functioning properly and meeting
conditions laid out by PHMSA, the statement said.
The company also said it will conduct aerial patrols and
visual inspections during the restart.
The pipeline, which delivers crude from Hardisty, Alberta,
to Cushing, Oklahoma and to Illinois, was shut last weekend
after a potential leak in South Dakota.
In an e-mailed statement to media on Friday, the company
said it identified a small leak near its Freeman pump station in
Hutchinson County, South Dakota.
The company added that it would be working with PHMSA to
return the line to service following completion of the repairs.
On Thursday, the Canadian pipeline company said about 400
barrels of oil could have leaked in South Dakota from its
pipeline, but was still investigating the source of the spill.
The spread between front to second month U.S. crude futures
CLc1-CLc2 widened by as much as 7 cents in the 10 minutes
following news of the Tuesday restart. It settled with May crude
at a $1.27 a barrel discount to June barrels.
The outage caused Canadian cash crude prices to fall
throughout the week with barrels for May delivery dropping to
two-month lows in the Hardisty, Alberta, hub.
"There are only a handful of pipelines available to export
barrels out of Canada and when a large pipeline like Keystone
goes offline, Canadian barrels become stranded and prices
suffer," said Michael Tran, director of energy strategy at RBC
Capital Markets in New York.
The restart quickly propped up Western Canadian Select heavy
blend crude for May, which traded last at $14.35 a barrel below
benchmark West Texas Intermediate, according to Shorcan Energy
brokers, from an intraday high of $15.05 a barrel discount.