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UPDATE 3-Enbridge plans oil pipeline outages, prices fall

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Wed Jan 5, 2011 4:10am IST

* Line 6B to be down in February, March

* Transport capacity already tight

* Canadian crude spreads widen (Adds reaction, details; in U.S. dollars)

By Jeffrey Jones

CALGARY, Alberta, Jan 4 (Reuters) - Enbridge Inc (ENB.TO) plans to shut a U.S. Midwest oil pipeline twice over the next two months to make repairs, the company said on Tuesday, putting more pressure Canadian crude prices.

The outages threaten to extend tight oil transport constraints that have created a glut of crude in Canada, the largest foreign supplier to the United States.

Enbridge, which carries most Canadian oil exports, plans a five-day shutdown of its 290,000 barrel a day Line 6B starting around Feb. 7, and another of the same duration around March 7, spokeswoman Lorraine Grymala said.

Line 6B extends to Sarnia, Ontario, from Griffith, Indiana. Last summer, Enbridge was forced to shut it down for nine weeks following a rupture and oil spill near Marshall, Michigan.

"We've actually got a lot of maintenance work going on right now on 6B," Grymala said. "These particular outages that we've got scheduled for February and March are related to replacing 14 segments along Line 6B."

Western Canada Select heavy blend crude for February delivery was quoted at around $23 a barrel under benchmark West Texas Intermediate light oil. That compares with January prices around $20 a barrel under WTI.

A series of pipeline problems over the past five months has raised questions about Canada's reliability as a supplier.

U.S. oil imports fell by 866,000 barrels a day last week, according to American Petroleum Institute data, and some of that was likely due to the pipeline squeeze, one analyst said. [ID:nN04242583]

High shipper nominations following a series of outages, as well as pressure restrictions on some lines, have forced Enbridge to ration capacity throughout its system.

Syncrude Canada Ltd, one of the country's largest oil sands producers, said last month it had been forced to cut shipments of synthetic oil.

Canadian Oil Sands trust COS_u.TO, the operation's largest stakeholder, said on its website this week that shipments in December fell 3 percent to 345,800 barrels a day due to pipeline constraints.

Devon Energy Corp (DVN.N) said on Tuesday it restarted 10,000 barrels a day of Canadian heavy production it had shut off last month. [ID:nN04235477]

However, marketers said they saw no indication that barrels were any easier to move out of the region. (Editing by Rob Wilson)

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