TransCanada's Keystone pipeline shut after 5,000-barrel leak in US

CALGARY, Alberta, Nov 16 (Reuters) - TransCanada Corp shut part of its Keystone oil pipeline system after a 5,000-barrel leak in South Dakota, the company said on Thursday, four days before neighboring Nebraska was set to decide on the company's long-delayed Keystone XL pipeline.

Opponents of TransCanada's proposed Keystone XL pipeline seized on the spill, saying it highlighted the risks posed by the XL project - which has become a symbol for environmentalists of fossil-fuel pollution and global warming.

TransCanada said in a statement it discovered the leak in the town of Amherst at 6 a.m. on Thursday after systems detected a drop in pressure, and that it was working with authorities as it investigates the cause.

South Dakota Department of Environmental and Natural Resources spokesman Brian Walsh said the leak came from an underground pipeline and that it had been contained at the site.

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A sixty-foot section of pipe is lowered into a trench during construction of the Gulf Coast Project pipeline in Prague, Oklahoma, U.S., on Monday, March 11, 2013. The Gulf Coast Project, a 485-mile crude oil pipeline being constructed by TransCanada Corp., is part of the Keystone XL Pipeline Project and will run from Cushing, Oklahoma to Nederland, Texas. Photographer: Daniel Acker/Bloomberg via Getty Images
TransCanada President and CEO Russ Girling (2nd L) announces the new Energy East Pipeline during a news conference in Calgary, Alberta, August 1, 2013. TransCanada Corp on Thursday said it would move ahead with a $12 billion oil pipeline to ship Western Canada's oil sands crude to refiners on its east coast and beyond, scaling up the project as its U.S.-bound Keystone XL line stalls in Washington. REUTERS/Todd Korol/File Photo
Shayne Walker, a weld inspector, fills out paperwork during construction of the Gulf Coast Project pipeline in Prague, Oklahoma, U.S., on Monday, March 11, 2013. The Gulf Coast Project, a 485-mile crude oil pipeline being constructed by TransCanada Corp., is part of the Keystone XL Pipeline Project and will run from Cushing, Oklahoma to Nederland, Texas. Photographer: Daniel Acker/Bloomberg via Getty Images
PORT ARTHUR, TEXAS - SEPT12: The Valero refinery works glow in the dusk light in Port Arthur, Texas. The state of Texas has placed a historical plaque noting that this area is near where the oil boom started in 1901. Port Arthur, Texas is the end of the line for oil that would travel through the proposed Keystone XL Pipeline. (Photo by Michael S. Williamson/The Washington Post via Getty Images
A depot used to store pipes for Transcanada Corp's planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota, January 25, 2017. REUTERS/Terray Sylvester
A depot used to store pipes for Transcanada Corp's planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota, January 25, 2017. REUTERS/Terray Sylvester
A depot used to store pipes for Transcanada Corp's planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota, January 25, 2017. REUTERS/Terray Sylvester
BUTTE, NEBRASKA - JULY 04: The Keystone XL pipeline at one point was going to run through the sensitive Sand Hills areas of Nebraska west of Butte, Nebraska. The pipeline has been rerouted and now skirts the Sand Hills, but still goes under the Niobrara River area pictured here.(Photo by Michael S. Williamson/The Washington Post via Getty Images
VALENTINE, NEBRASKA - JULY 04: The Keystone XL pipeline at one point was going to run through the sensitive Sand Hills areas of Nebraska in the vicinity of Valentine, Nebraska. The pipeline has been rerouted to the east and now avoids the sensitive the Sand Hills, so it will not pass through this area at the Minnechaduza Creek. (Photo by Michael S. Williamson/The Washington Post via Getty Images
North Dakota rancher Bob Banderet stands in front of the Keystone pumping station that dumped 500-barrels of tar sands crude on the North Dakota prairie outside of the small town of Cogswell. Bandaret witnessed the spill from his nearby farmhouse and alerted authorities, even before TransCanada was aware of the break. From Oil and Water: Following the route of the Keystone XL pipeline through the USA. (Photo by Lucas Oleniuk/Toronto Star via Getty Images)
PORT ARTHUR, TEXAS - SEPT12: The Valero refinery looms on the horizon in Port Arthur Texas. Port Arthur, Texas is the end of the line for oil that would travel through the proposed Keystone XL Pipeline. (Photo by Michael S. Williamson/The Washington Post via Getty Images
PORT ARTHUR, TEXAS - SEPT12: Maintenance work is constant at the Valero refinery in Port Arthur, Texas. Port Arthur, Texas is the end of the line for oil that would travel through the proposed Keystone XL Pipeline. (Photo by Michael S. Williamson/The Washington Post via Getty Images
Equipment sits near a section of pipeline during construction of the Gulf Coast Project pipeline in Atoka, Oklahoma, U.S., on Monday, March 11, 2013. The Gulf Coast Project, a 485-mile crude oil pipeline being constructed by TransCanada Corp., is part of the Keystone XL Pipeline Project and will run from Cushing, Oklahoma to Nederland, Texas. Photographer: Daniel Acker/Bloomberg via Getty Images
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U.S. President Donald Trump has made Keystone XL a key plank in his energy policy and handed TransCanada a federal permit in March, reversing former President Barack Obama's decision to reject the line on environmental grounds after years of study.

Trump has argued that the 830,000-barrel pipeline, which would serve as an extension of the existing Keystone system linking Alberta oil to U.S. refineries, will lower fuel prices, shore up national security and bring jobs.

TransCanada and its supporters have also said the project would bring significant economic benefits, and could be operated safely.

"If this spill had happened along the proposed route in Nebraska, it would be absolutely devastating," said Brian Jorde, a lawyer representing Nebraska landowners opposed to Keystone XL. "Their proposed route is within a mile of thousands of water wells."

"We hope the PSC is paying attention," said Greenpeace campaigner Mike Hudema, referring to the regulatory body that will rule on XL.

The Nebraska Public Service Commission, or PSC, is scheduled on Monday to announce a decision on whether the proposed pipeline route through the state is in the best interests of Nebraskans. It is not allowed to consider the potential of spills as the project already has an environmental permit.

A rejection of the route would dim the chances the project gets built and would be a setback for both Trump and the Canadian energy sector, which says it needs more export routes to fetch better prices.

Other states have already approved XL's route.

TransCanada said the spill in South Dakota had led the company to shut the Keystone pipeline from Hardisty, Alberta, to Cushing, Oklahoma, and to Wood River and Patoka in Illinois. It said the southern leg of the system to the Gulf Coast remained operational.

Canadian heavy crude differentials for December delivery in Hardisty, Alberta, widened to $14.65 per barrel below U.S. crude from a discount of around $14.20 per barrel the previous day.

Thursday was the last day of the Canadian crude trading window, meaning volumes were thin, but traders said the sell-off could deepen if it appeared the pipeline would be down for some time, leading to a glut of crude in Alberta.

Canadian heavy crude for January delivery also widened 40 cents to $15.50 per barrel below U.S. crude.

(Reporting by Ethan Lou and Nia Williams in Calgary, Alberta; Editing by Richard Valdman and Peter Cooney)

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