Regulator in Canada's Alberta shuts in 95 Nexen pipelines over 'noncompliance'

Sat Aug 29, 2015 8:39pm EDT
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By Mike De Souza

CALGARY, Canada (Reuters) - Alberta's energy regulator has shut in 95 Nexen Energy pipelines, over concerns the company allegedly violated pipeline maintenance and monitoring rules.

The order, issued on Friday evening by the regulator in the oil-rich Canadian province, comes more than a month after Nexen, which is owned by CNOOC Ltd, discovered one of the largest ever oil-related pipeline spills on North American soil at its Long Lake Facility in northern Alberta.

The Alberta Energy Regulator (AER) said it received information that indicated noncompliance with pipeline safety rules on multiple lines in the course of its investigation at the site, southeast of Fort McMurray.

The order suspends 15 pipeline licenses for 95 pipelines that carry a range of products including crude oil, natural gas, salt water, fresh water and emulsion, the regulator said. It is also requiring Nexen to demonstrate that its pipelines can be operated safely.

In a statement, Nexen said it discovered "a number of non-compliances" in an internal audit related primarily to maintenance activities and disclosed this to the regulator last Tuesday, along with an action plan.

It also said it was preparing to comply with the suspension order as it works to compile other records requested by the regulator.

It was not immediately clear whether the order would affect production. Long Lake has a capacity of 72,000 barrels per day, but following the spill, Nexen said in July that it was producing about 50,000 bpd.

A company spokeswoman on Saturday said Nexen would provide more information about the impact of the suspension as it becomes available.   Continued...

Senior Vice President Canadians operations Ron Bailey (L) and CEO Fang Zhi
 show reporters a jar of bitumen at Nexen spill site near Nexen Energy's Long Lake oilsands facility, south of Fort McMurray, Alberta July 22, 2015. REUTERS/Mike DeSouza