Tesoro Logistics LP
), an affiliate of independent refiner
) recently brought online the North Dakota crude oil pipeline
that was shut down on Sep 29 due to an oil spillage incident.
The 35-mile underground pipeline, running from Tioga to Black
Slough in North Dakota, reportedly ruptured and spilled over
20,000 barrels of oil on a farmland near Tioga. Initial
investigation by the federal body indicates that a lightning
strike was the cause. However, Tesoro Logistics has sent the
damaged portion of the pipeline for further analysis.
The 20-year old pipeline was up and working post announcement by
the San Antonio-based company that it has adopted the safety
measures stated by the federal Pipeline and Hazardous Materials
Safety Administration (PHMSA).
Before restarting the pipeline, Tesoro Logistics itself took
several measures to ensure the safety and integrity of the line.
These included a hydrotest on the replaced portion, tightness
test holding pressure on the 35-mile pipeline, inspection of six
different locations on the pipeline and installation of
additional monitoring systems to detect leaks.
Tesoro Logistics is expected to bear a cost of about $4 million
in cleaning up the spill which is estimated as one of the largest
in the state's history. Of the 20,600 barrels spilled, the
company has dealt with about 4,500 barrels till now. Regulators
believe that the incident has not caused any harm to ground water
or wildlife. The pipeline was built by the British energy giant,
) in 1993.
Tesoro Logistics is involved in the acquisition and development
of logistics properties of crude oil and refined products and
currently holds a Zacks Rank #5 (Strong Sell), implying that it
is expected to significantly underperform the broader U.S. equity
market over the next one to three months.
Meanwhile, one can consider other stocks like
Pioneer Southwest Energy Partners L.P.
) as good investment opportunities. The stock currently holds a
Zacks Rank #1 (Strong Buy).
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