Key insights
- A rupture in Plains All American's Line 63 oil pipeline in East Los Angeles, caused by third-party excavation, led to a temporary shutdown. While unaffected portions are restarting to minimize refinery disruptions, the incident could exacerbate crude supply issues for regional refineries already facing high gasoline prices. The leak, estimated at five gallons per second, flowed into a storm drain before being stopped. The overall impact on US equities is slightly negative due to potential localized energy price pressures.
By Georgina McCartney, Arathy Somasekhar and Ashitha Shivaprasad
May 22 (Reuters) - Plains All American said on Friday it would soon restart unaffected portions of an oil pipeline in East Los Angeles after a section was shut down following a rupture.
The line was struck by a third party conducting excavation work, the company had said earlier in the day. It did not provide details on how much oil may have leaked.
The ruptured pipeline was Line 63, which gathers and distributes crude oil from the San Joaquin Valley for delivery to another pipeline and local refiners, two trading sources said.
Plains’ unit Pacific Pipeline will be restarting the unaffected portion of the pipeline within the next couple of hours to minimize disruptions to the surrounding refineries, the company said.
A partial shutdown of the pipeline could disrupt crude supplies to regional refineries and hit processing at a time when the U.S.–Israeli war on Iran has sharply driven up fuel prices in the region. California gasoline prices stood at $6.131 on Friday, the highest in the nation.
"Refiners in the LA area are short crude and rely heavily on foreign crude. This exacerbates that problem," said one of the sources, a California crude trader.
The fire department said a coordinated clean-up effort is underway and that there were no injuries due to the incident.
Crews on site estimated around five gallons of oil a second were leaking from the line, according to Aaron Katon, Los Angeles County Fire Captain. The operator shut it down after 30 minutes and some oil flowed into a storm drain.
"Units responded to a petroleum line leak that was hit during construction," it said, adding that the pipe was shut down at the source and the flow had been stopped.