Oil and Gas

UPDATE 1-Canada's Saskatchewan province reviews pipeline rules after Husky spill

(Adds Husky comment, paragraph 9)

WINNIPEG, Manitoba, March 23 (Reuters) - The western Canadian province of Saskatchewan will review regulations and engineering standards for pipelines around bodies of water following a Husky Energy Inc oil spill last year into a major river.

Husky’s July 2016 spill into the North Saskatchewan River forced the cities of Prince Albert and North Battleford to find alternative temporary sources of drinking water. In total, 225 cubic meters of oil blended with distillates leaked, with 60 percent contained on land, Saskatchewan’s ministry of economy said on Thursday.

“Since the Husky spill in July, we’ve recognized that we need to do better when it comes to preventing incidents,” Energy and Resources Minister Dustin Duncan said in a statement.

Pipeline safety is a sensitive issue in Canada, where Prime Minister Justin Trudeau’s government in November approved a new Kinder Morgan Inc pipeline. Pipelines are viewed by the oil-rich provinces of Alberta and Saskatchewan as critical to move crude oil, but they have drawn fierce opposition from environmental and indigenous groups.

On Monday, the Alberta Energy Regulator said it was responding to a Husky crude oil spill in that province.

Saskatchewan’s economy ministry said the province would strengthen regulatory standards for pipelines around water to deal with risks such as slope movement. It will also review the design of existing pipelines near water.

The Husky pipeline that leaked was built in 1997.

The government concluded that a buckle in the pipeline cracked and caused the spill due to ground movement on a slope of land over many years, mirroring the company’s earlier conclusion.

“Husky accepts full responsibility and is using what we’ve learned from this incident to improve our systems and operating procedures,” company spokesman Mel Duvall said in an email.

The findings will be reviewed by Saskatchewan justice officials for possible charges against Husky, government spokeswoman Karen Hill said.

In its 2017/18 budget, released on Wednesday, Saskatchewan said it would hire more inspectors for the oil and gas industry. (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Andrew Hay and Dan Grebler)