Clogged pipeline delays restart of Suncor's MacKay River facility -sources

Wed Jun 15, 2016 5:53pm EDT
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By Liz Hampton

June 15 (Reuters) - An Enbridge Inc pipeline connected to Suncor Energy Inc's MacKay River oil sands facility near Fort McMurray, Alberta, has clogged after heavy oil cooled in the system, prolonging a shutdown of the site, three sources familiar with the matter said on Wednesday.

The pipeline clogged after last month's massive Alberta wildfire shut more than 1 million barrels a day of oil production and forced oil sands producers to shut facilities, including thermal projects that require ongoing heat to operate effectively.

It was not immediately clear how long repairs would take, but the sources estimated about 20 days. One source close to the matter said the roughly 32-km (20-mile) line would be excavated every 2 km (1.2 miles) and injected with diesel.

It represents a setback for Suncor, the largest crude producer in Canada, as it had said last week it expected all its operations in the area to be at normal rates by the end of June. MacKay River has a capacity of 38,000 barrels per day, so it is the smallest of three main properties in the Fort McMurray region, where the fire was concentrated.

Bitumen is the primary product extracted from Alberta's vast oil sands, but its asphalt-like consistency means it will not flow through pipes by itself. Rather, it needs to be heated or diluted with lighter hydrocarbons to flow. This pipeline was insulated to pump heated bitumen.

A representative for Enbridge said the company could not provide information because the pipeline was a client-specific line. Suncor said it did not provide real-time status updates or "this level of granular detail on our operations."

"It sounds like they are running into problems along the road," said FirstEnergy analyst Martin King, referring to oil sands producers in general.

King could not comment specifically on Enbridge and Suncor, but added: "The bitumen is cooling in the pipes as the flow has slowed or stopped, so the bitumen has solidified inside the pipes. They will have to open up the pipe and reheat it to get it flowing."

Suncor has told employees the wildfire will cost the company nearly C$1 billion ($778 million). (Reporting by Liz Hampton in Houston; Additional reporting by Eric M. Johnson and Nia Williams in Calgary, Alberta, and Catherine Ngai in New York; Editing by Peter Cooney)