Magellan Midstream Pipeline Ruptures in Texas

Reuters, July 14, 2017

A Magellan Midstream Partners oil pipeline leaked some 1,200 barrels of crude on Thursday, triggering the evacuation of nearby homes while cleanup operations were underway, the company said in a statement. Magellan's 275,000 barrel per day (bpd) Longhorn Pipeline, which transports crude oil from Crane, Texas to Houston, ruptured about four miles (6 km) southwest of Bastrop, a town not far from the state capital of Austin. The company shut the pipeline and isolated the affected segment, it said.

People from 15 residences near the site were evacuated due to the spill, but will be cleared by authorities to return home late on Thursday, the company statement said. A road shut following the spill is expected to remain closed until at least Friday, the Bastrop County Office of Emergency Management said on Twitter.

The pipeline was ruptured when a contractor doing maintenance work hit a fitting, Magellan said. The line was in service at the time. The spilled oil has been contained around the site and it did not reach water, Magellan said. Around 100 representatives were involved in cleanup efforts, the company added. The Pipeline and Hazardous Materials Safety Administration (PHMSA) said in an email that it had dispatched an inspector to the site.

The Longhorn Pipeline transports crude oil from the prolific Permian Basin shale of West Texas to the major refining and export center in Houston, Texas. Crude oil prices in West Texas slid following news of the spill, while Houston oil prices firmed on the potential supply disruption. West Texas Intermediate (WTI) at Midland, Texas, fell to about a $1.45 a barrel discount to WTI futures, off around 15 cents a barrel from Wednesday, traders said. Oil traded at the Magellan East Houston terminal rose by 10 cents to a $1.80 a barrel premium to U.S. crude futures.

(Reporting by Liz Hampton in Houston, additional reporting by Julia Simon in New York; editing by Richard Chang and Tom Brown)

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