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Canada regulator shuts down Suncor offshore oil site over failed pump

(Reuters) - The oil regulator for the Atlantic Canadian province of Newfoundland and Labrador has ordered Suncor Energy's SU.TO offshore Terra Nova site to shut down, finding the company's fire water pump system was non-compliant.

FILE PHOTO: Suncor Energy facility is seen in Sherwood Park, Alberta, Canada August 21, 2019. REUTERS/Candace Elliott

Terra Nova, operating in the Atlantic Ocean 350 kilometers (217 miles) east of St. John’s, failed to maintain and inspect critical safety equipment, carry out timely repairs and ensure it mitigated potential hazards, the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) said in a statement on Thursday.

The regulator said Suncor, which operates the vessel, specifically failed to meet requirements regarding its redundant fire water pump system on the floating installation.

One of two water pumps failed on Nov. 7, and since then Suncor has used a seawater lift pump as a backup, said Suncor spokeswoman Jessica Depencier. The C-NLOPB has authorized this alternative in the past, but determined in this case that the seawater pump was an insufficient back-up, she said.

Suncor shut down production on Thursday to comply with the order, she said.

The suspension will continue until Suncor addresses the shortcomings, C-NLOPB said.

Terra Nova can store 960,000 barrels of oil, according to Suncor, which owns nearly 38%. Other companies, including Husky Energy HSE.TO, own smaller stakes in the project.

Seeing the regulator act before a potential disaster is encouraging, but it is unclear why it did not act sooner, said Gretchen Fitzgerald, national programs director for Sierra Club Canada Foundation, an environmental group.

Unlike Canada’s national approach to major projects, which separates industry regulation from environmental impact assessment, offshore regulators combine the roles, Fitzgerald said.

“We have had a lot of concerns over the years about how the regulator is a promoter of the industry and its expansion and is thereby in a conflict of interest,” Fitzgerald said.

Any decision on separating those roles would be up to government, said Lesley Rideout, spokeswoman for the C-NLOPB.

“We regulate in the public interest, remaining focused on regulatory oversight that reduces risk to safety and the environment to levels that are as low as reasonably practicable,” she said.

Last year, a spill of 1,572 barrels of oil at Husky’s White Rose was the largest ever recorded off the coast of Newfoundland and Labrador.

Suncor shares dipped 0.4% in Toronto.

Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Chizu Nomiyama and Grant McCool

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