Fire-idled oilsands plants making plans to restart
Production will resume at oilsands projects north of Fort McMurray in the coming days and “short weeks” after an out-of-control wildfire raged through the area, though there is still no timeline for projects south of the city returning to normal operations.
“Operations will only restart when it is absolutely safe to do so,” Alberta Premier Rachel Notley said Tuesday after a meeting with the CEOs of oilsands, pipeline and power companies with assets around Fort McMurray.
Notley said that companies with oilsands mines north of the city, where the majority of affected production is located, would begin operating in the “coming days and short weeks.”
She said there was no damage to oilsands facilities north of the city, though there has been damage to some projects south of the city, including Nexen Energy ULC’s Long Lake project.
Tuesday’s meeting was scheduled to draw up plans for resuming operations at oilsands projects and pipelines surrounding Fort McMurray, after the raging fire forced 88,000 people to flee the area and took over one million barrels of daily oil production off-line.
The outages cost affected companies an estimated $70 million in forgone revenues each day, according to ARC Financial estimates.
Suncor Energy Inc. president and CEO Steve Williams said his company was already working to restart production after shutting down operations at three of its facilities on Thursday, taking 300,000 bpd off-line in the process.
Williams said he anticipated oilsands companies, including Suncor, would resume production north of Fort McMurray “in the coming days and maybe a week or so, but you’re not talking longer periods.”
Shell Canada Ltd. announced it had restarted production late Monday, albeit at reduced rates, at its 255,000 bpd oilsands mining projects 95 kilometres north of Fort McMurray.
“Safely resuming some of our operations will help us continue to provide fuel to the firefighters, ambulances, planes and others dedicated to the response efforts,” Shell’s executive vice-president, oilsands Zoe Yujnovich said in a news release.
Syncrude Canada Ltd., a jointventure in which Suncor is a majority owner, restarted power at its Aurora mine at midnight Monday in preparation for a larger restart.
Other operations around the city are still off-line or are producing at reduced rates.
Analysts said this week that production could take a week to resume at those facilities after the threat has passed. The fire is still classified as out of control, though the active burning zones have moved away from the city and away from many projects.
Martin King, vice-president of institutional research for FirstEnergy Capital Corp., said in a research note that “even if the threat is relatively short lived, (hopefully) lasting no more than a few days, getting all of the sites and pipelines back to full operations could be time consuming, running a week or more.”
One of the challenges with restarting the affected oilsands projects is flying enough staff and food back up to the plants, spokespeople for various companies have said.
The fire caused minor damage to Nexen’s oilsands facility south of the city and to Enbridge Inc.’s above-ground facilities along its pipelines in the area. The company said its below-ground pipelines were protected from the fire.