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Syncrude Uncertain about Plant Fire Affecting Production

Maritime Activity Reports, Inc.

August 30, 2015


The operator of Canada's largest synthetic crude project said on Saturday it is investigating the causes of an early morning fire at an upgrading plant.

Firefighters extinguished the blaze, at Syncrude Canada's Mildred Lake upgrading complex in northern Alberta, and no one was injured, said company spokesman Will Gibson in a phone interview.

The fire broke out a few hours after the province's energy regulator announced it was shutting in 95 pipelines operated by Nexen, one of the partners in the project, because of safety issues identified following a large oil-related spill in July.

But he said it was too soon to know how production would be affected.

Syncrude is a 326,000 barrel-per-day mining and upgrading project, at which mined oil sands bitumen is upgraded into refinery-ready synthetic crude.

The operations are a joint venture of seven partners: Canadian Oil Sands Ltd, Suncor Energy Inc, Imperial Oil Ltd, Nippon Oil subsidiary Mocal Energy Ltd, Murphy Oil Corp, China's Sinopec , and Nexen, a subsidiary of CNOOC Ltd.

"Production is ongoing at our site," said Gibson. "There is an area in our upgrading complex that is affected ... but our operations are continuing in other areas of our upgrader and our operation as a whole."

Gibson said the company had also restricted access to the site to Syncrude employees. He added that the fire did not affect air quality in the region.

Canada's oil and gas industry is facing mounting criticism from conservation groups about its environmental performance. Companies are also facing economic challenges because of slumping oil prices, which have prompted thousands of layoffs in recent months.

Earlier this month, Syncrude released a presentation that estimated it was losing about $6 for every barrel of oil it produces.

The Alberta Energy Regulator is also investigating another incident in August at Syncrude's Mildred Lake oil sands mine site, where about 30 blue herons were found dead.

(Reporting By Mike De Souza; Editing by Steve Orlofsky)

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