Canada wildfire evacuations curb oilfield, pipeline flow

(Reuters) - The wildfire that raged on Thursday in Fort McMurray in the heart of the Canadian oil sands region knocked out as much as a third of Canada’s daily crude capacity and closed some pipelines.

Wildfire is worsening along highway 63 Fort McMurray, Alberta, Canada, May 3, 2016. Terry Reith/CBC News/Handout via REUTERS

While oil sands facilities are not in the fire’s path, several production companies and two pipeline operators have curbed activities to take precautions to move workers and others to other areas.

At least 680,000 barrels per day of capacity were offline on Thursday, according to calculations by Reuters. That does not include the unspecified reduction in Syncrude output or Suncor thermal operations, meaning the total is likely higher.

Following is a list of what oil producers and pipeline companies have said about nearby operations:

- Imperial Oil Ltd said that as a precaution, workforce levels at its Kearl oil sands mining project have been reduced to essential staff only. Production has been reduced by an unspecified amount. It said its physical plant is unaffected by the fires.

- Athabasca Oil Corp said it would shut down the Hangingstone Project and evacuate all personnel. The fire front is estimated to be within 3 miles (5 km) of the Hangingstone site. The company said it was in the process of shutting down the well sites and the central facility. On its website, the company wrote that with a production ramp-up underway, the project was expected to produce 12,000 bpd by Q4 2016

- Statoil ASA said production at its Leismer oil sands project has been cut by 50 percent to 10,000 bpd to preserve supplies of diluent, which is added to viscous oil sands bitumen so it can flow through pipelines.

- Canadian Natural Resources Ltd said there had been some operations outages at its Horizon project, but current operations are stable.

- ConocoPhillips said it had shut its 30,000 bpd Surmount operations and evacuated people and workers from the site.

- Nexen Energy, a wholly owned subsidiary of China’s CNOOC, said late on Wednesday that it was shutting its Long Lake oil sands facility.

Long Lake can produce around 50,000 bpd of synthetic crude but has been operating at reduced rates since late January, when an explosion at the plant left two employees dead.

- Suncor Energy Inc, whose oil sands operations are closest to the city, has closed its main mining site, which can produce up to 350,000 bpd.

Before the shutdown, the site was operating at reduced levels because of a turnaround there.

Due to the reduced availability of diluent in the region, the company said its thermal oil sands operations, including the Syncrude facilities, are all working at reduced rates.

It said its main plant 25 km (16 miles) to the north was safe.

- Royal Dutch Shell Plc said it had closed its Muskeg River and Jackpine oil sands mines, whose combined capacity is 255,000 bpd.

- Husky Energy said it had cut production at its Sunrise oil sands project to 10,000 bpd from 30,000 bpd after a pipeline that supplies the project with diluent was shut down.

- Connacher Oil and Gas Ltd said on Thursday morning it was bringing its Great Divide production back up to 8,000 bpd, after cutting it to 4,000 bpd on Wednesday.

Great Divide is 80 km south of the city, and produced 14,000 bpd in the fourth quarter.

- The Syncrude oil sands project, owned by a consortium of companies including Suncor, said it was reducing operations to help support employees affected by the fire. Syncrude has 2,000 evacuees staying at its camp.

- The following oil sands companies with operations in the region said they were not affected: Cenovus Energy; MEG Energy; and Japan Canada Oil Sands Ltd.


- Enbridge Inc said it shut all pipelines in and out of Cheecham Terminal on Wednesday evening.

The Cheecham facility was evacuated and the Athabasca Terminal reduced to a minimum staff for safety reasons. Line 19 south of Kirby Lake continues to operate, it added.

- Midstream energy company Keyera Corp said its South Cheecham rail and truck terminal, 75 km (47 miles) south of Fort McMurray, has been evacuated and shut down.

South Cheecham is a joint venture between Keyera Corp and Enbridge.

- Inter Pipeline Ltd said on Thursday it has reopened its Polaris diluent pipeline to the Fort McMurray area and is ready to reopen its Corridor pipeline system that serves Shell’s oil sands facilities when that operation reopens.

No pipeline assets incurred significant damage as a result of the wildfires.

- TransCanada Corp said it does not expect the wildfire to affect deliveries of natural gas. The nearest pipeline is about 20 km west of the current wildfire.

Reporting by Nia Williams in Calgary and Euan Rocha and Jeffrey Hodgson in Toronto; Compiled by David Gaffen and Josephine Mason in New York; Editing by Diane Craft and Cynthia Osterman