Power output in Alberta oil sands near pre-fire levels

Thu Jun 23, 2016 3:45pm EDT
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By Scott DiSavino

(Reuters) - The amount of power generated by cogeneration electric plants around the fire-ravaged town of Fort McMurray in Alberta, Canada, climbed near levels seen before wildfires forced oil sands producers to shut their facilities in May.

Analysts look to the rising output from the cogeneration plants as a precursor to an increase in production from the oil sands facilities.

"The rising cogeneration output says that most of these operations are fully up or on the way back," said Martin King, an analyst at Alberta energy advisory FirstEnergy Capital.

Cogeneration plants produce electricity that powers oil sand operations, as well as steam to cook the oil sands to produce crude.

Total cogeneration production around Fort McMurray hit 1,216 megawatts midday Thursday as several plants boosted output, up from 989 MW Wednesday morning, according to the Alberta Electric System Operator, which operates the province's power grid.

Before the wildfires started on May 1, the Fort McMurray units were producing about 1,300 MW, according to local media reports. Power production fell as low as 342 MW on May 17.

A couple of cogeneration units remain out of service at the Nexen and MacKay River facilities, the latter of which is dealing with a clogged pipeline.

Oil sands production in the Fort McMurray area was still curtailed by about 400,000 barrels per day on Wednesday, down from a peak of about 1.2 million bpd shut in mid-May, according to FirstEnergy. That includes maintenance outages started prior to the fires and shut-ins since the fires started on May 1.   Continued...

A group of South African firefighters work to uproot a tree as they remove hot spots from a massive wildfire outside of Fort McMurray, Alberta, Canada June 2, 2016. REUTERS/Topher Seguin/File Photo