Nexen to shut Ft. Mac facility
2-week shutdown latest step after pipeline suspension
Nexen Energy is shutting down its Long Lake oilsands operations as it complies with a pipeline suspension order from the Alberta Energy Regulator.
The company, a subsidiary of Chinese state-owned CNOOC Ltd., says it will take up to two weeks to complete the shutdown of the complex steam-assisted gravity drainage (SAGD) operation, located about 36 kilometres southeast of Fort McMurray.
Last Friday, the regulator ordered that the company cease operation of 95 pipelines on the site after determining it had not provided adequate records of maintenance, inspection and monitoring of the pipelines. The order was prompted by Nexen’s admission to the regulator that an internal company audit revealed compliance and safety issues with its pipelines.
AER spokesman Bob Curran said Tuesday the order affects roughly one-quarter of Nexen’s pipelines at the Long Lake facility.
It’s not yet clear why the company is shutting down its Long Lake operations when the suspension order affects only a quarter of its pipelines there.
Nexen spokeswoman Diane Kossman said in an email the suspension order is “not expected to have any material impact on CNOOC Ltd.’s operations or financial conditions.”
But she wouldn’t say how the closing will impact oil production at the facility.
She also didn’t say if any jobs would be lost.
“We don’t disclose production information on individual assets,” she said.
Staff remain on-site to “safely manage operations” and ensure compliance with the regulator’s suspension order.
“We can’t speculate on how long operations will remain shut down,” she said. “We do look forward to continuing to work with the AER to address this issue in a timely manner.”
Curran said the regulator is focused on ensuring the company can meet compliance requirements for the 95 pipelines.
The order will remain in effect until Nexen can prove the pipelines can be operated safely, Curran added.
Energy Minister Marg McCuaig-Boyd was unavailable for an interview Tuesday, but said in a statement the province expects companies in Alberta to take pipeline safety seriously.
“The regulator has assured me that the suspension of pipeline activity won’t be lifted until the company can fully demonstrate they can operate safely,” she said.
“I will remain in regular contact with the AER on this issue.”
The pipeline suspensions come as the regulator continues to investigate a pipeline spill July 15 at the Long Lake operation that leaked about five million litres of a mixture of bitumen, produced water and sand into muskeg.
In the SAGD process, steam from a central plant is sent by a pipeline and pumped down a well. The heated bitumen comes up a second well and is sent by pipeline to the upgrader.
The leaking pipeline was transporting heated bitumen. Installed in 2014, it was new technology — a 16-inch pipe within a larger 20-inch pipe. Next to it was a smaller pipeline carrying water to boilers.
Greenpeace, an environmental advocacy group, said the regulator’s enforcement order indicates the province is finally “getting tough” about pipeline safety.
“This decision should send a message to all pipeline operators that lax safety procedures that put Alberta’s environment and communities at risk are not acceptable,” spokesman Mike Hudema said on the weekend.
“We hope this is just a first government step into a much longer look into Alberta’s mounting pipeline problems.” With files from Sheila Pratt, Edmonton Journal, and The Canadian Press mibrahim@edmontonjournal.com Twitter.com/mariamdena