By Nia Williams
CALGARY, Alberta, Aug 12 (Reuters) - Heavy Canadian crudeslumped to its lowest level in at least a decade on Wednesdayafter Enbridge Inc closed two of its main pipelines inthe United States because of a leak, piling fresh misery onCanadian oil companies that are close to producing at a loss.
Western Canada Select heavy blend crude for Septemberdelivery last traded at $21.75 per barrel below the West TexasIntermediate benchmark, according to Shorcan Energy brokers,having settled at $19.80 per barrel below on Tuesday.
It was the widest differential since August last year andpushed the outright price of Canadian heavy crude to around$22.50 a barrel, a level at which some companies will struggleto cover the cost of production, blending and transportation.
That was lower than the 2008 trough of $24.62, according toone trading source, when U.S. benchmark crude plunged to $32 abarrel as a result of the global financial crisis.
Enbridge shut down its Flanagan South and Spearheadpipelines in the U.S. Midwest late on Tuesday, with no timelineas to when they will reopen.
The pipelines, which have a combined capacity of nearly800,000 barrels per day, carry crude to the U.S. oil futures hubof Cushing, Oklahoma, and are two of the main conduits linkingAlberta's oil sands to refineries on the U.S. Gulf Coast.
The shutdown means crude could get bottlenecked in Alberta,putting further pressure on heavy prices which were alreadybeing offered lower after BP Plc's Whiting, Indiana,refinery suffered damage over the weekend that could take one totwo months to repair.
Whiting is one of the biggest consumers of heavy Canadiancrude and the reduced demand comes at a time when oil sandsproduction, in particular from Imperial Oil's Kearl oilsands project in northern Alberta, is ramping up rapidly.
"This will further weigh on Canadian differentials followingthe unplanned BP Whiting outage and heavy PADD 2 maintenancestarting in September," said Dominic Haywood, an analyst withEnergy Aspects.
Traders in Calgary described the latest price drop as"horrible", and said many were anticipating mid-monthapportionment rationing the volume of crude each shipper can puton Enbridge lines.
Flanagan South and Spearhead also transport light and sweetcrude and traders said they expected an impact on those gradestoo.
Light synthetic crude from the oil sands for Septemberdelivery was bid at $5.25 and offered at $4.50 a barrel belowWTI. It settled at $4.30 per barrel below the benchmark onTuesday. (Additional reporting by Jessica Resnick-Ault; Editing by GrantMcCool)
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