Enbridge: Minnesota Pipeline Blast at Previously Repaired Leak

CLEARBROOK, Minn Nov 30, 2007 (From AP via Dow Jones Newswires)

A Minnesota oil pipeline explosion that killed two workers and caused a spike in oil prices can be traced back to a pinhole leak first repaired three weeks ago, the company said.

The fire was extinguished Thursday morning, and oil prices ended the day just slightly higher after it became clear that the Enbridge Energy (ENB) pipeline would come back on line quickly.

The pinhole leak was fixed with a repair sleeve earlier this month.

On Wednesday, workers shut down the pipeline to remove the 11-foot section that included the pinhole and sleeve. They replaced it with a new section of pipeline, but oil apparently leaked at a section where that joined the old line, said Leon Zupan, Enbridge's vice president of operations.

The company's metallurgists want to analyze the section to better understand why it leaked, said Enbridge spokesman Larry Springer. Electronic tools were put inside the pipeline in 2006 looking for dents and metal loss.

"There were no problems found in that area where the leak occurred," he said.

The killed workers were identified by Enbridge on Thursday as Dave Mussati Jr. and Steve Arnovich, both contract workers from its Superior, Wis., office.

Calgary-based Enbridge Energy Inc.'s pipeline carries crude oil from Saskatchewan, Canada, to the Chicago area. The area where the fire occurred, Clearbrook, is about 215 miles northwest of Minneapolis.

It carries roughly 16% of U.S. crude oil imports, and oil prices shot up more than $4 a barrel early Thursday when word of the fire first reached oil markets. But three of the four lines were operating by that afternoon. The company said the fourth line, where the fire occurred, would probably be usable again in two or three days.

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