Alberta oil output starts to ramp up as fires ease

Wed May 25, 2011 6:21pm EDT
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Oil companies restarted operations in northern Alberta on Wednesday as the threat of wildfires eased, and the short duration of the outages should limit any impact on their financial results.

More than 150,000 barrels a day of heavy oil production near Slave Lake, Alberta, has been shut down for about a week, most of it because wildfires caused a power outage that idled a segment of a regional pipeline that carries the crude.

Plains All American Pipeline LP said on Wednesday it had reopened the southern leg of its 187,000 barrel a day Rainbow line, which takes oil to the Edmonton refining and pipeline hub from the Pelican Lake production area.

The segment was flowing at about 136,000 bpd, an average rate for current supply and demand conditions, said Stephen Bart, vice-president of crude oil operations for Plains' Canadian unit.

The northern part of the Rainbow line remained shut due to an April 29 rupture that was unrelated to the wildfires. It is awaiting regulatory approval to restart.

"We certainly haven't had the combination of events that we've had here in the recent month, but the good news is we have an emergency response plan that's on file with regulators that provides for most every contingency including the forest fire threat," Bart said.

The fires, which destroyed large parts of the town of Slave Lake and forced an evacuation, have fallen in number to 43 from more than 100 last week as 2,000 firefighters battled the flames and damp weather moved into the area, the Alberta government said. Four fires are still classified as out of control.

Canadian Natural Resources Ltd said it was in the process of restarting its 40,000 bpd Pelican Lake heavy oil field and Cenovus Energy Inc began ramping up its 22,000 bpd operation in that region.   Continued...

<p>Canadian Prime Minister Stephen Harper (C) answers questions at a news conference in downtown Slave Lake, Alberta, May 20, 2011. REUTERS/Todd Korol</p>