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Nexen baffled by 'fish mouth' leak from new double-walled pipeline

Calgary Herald logo Calgary Herald 2015-07-17 Dan Healing, Calgary Herald
071715-0718-Pipeline8-39025113-0718-Pipeline8-W.jpg Nexen baffled by "fish mouth" leak from new double-walled pipeline

Oilsands emulsion surged out of a hole that looked like a “fish mouth” in a northern Alberta pipeline this week even though it was a high-pressure, double-walled conduit that had been installed less than nine months ago, a Nexen executive revealed Friday.

Furthermore, the leak which spilled five million litres of bitumen, produced water and sand over an area the size of three football fields was detected by a contractor walking in the area because systems designed to shut the pipeline automatically had not been activated, Ron Bailey, senior vice-president of Canadian operations, told reporters at a news conference at a downtown hotel.

The company is “deeply concerned” and “sincerely apologizes” for the impact of the leak from its 20-inch pipeline, Bailey said, adding the incident has been noted at the Chinese headquarters of CNOOC Ltd., the international oil company that bought Calgary-based Nexen Inc. for $15.1 billion in 2013.

A photograph showing the pipeline spill was on display as Nexen Senior Vice-President, Canadian Operations Ron Bailey provided an update regarding the pipeline failure near Nexen’s Long Lake facility during a press conference on July 17, 2015.

“Our parent company has been extremely supportive,” Bailey said. “CNOOC had people online on video conference with us almost immediately as we stepped up our response and they continue to be very supportive, including an email to me from the president last night.”

He said Nexen chief executive Fang Zhi was in China when the leak was detected.

Bailey said the pipeline was shut down immediately and will remain closed for an undetermined time. Crews had contained the spilled material with a berm where it fouled muskeg at one end although most of it pooled on the pipeline right-of-way. Vacuuming of the spill was expected to begin Friday morning after a road was built to allow truck access.

The pipeline was double-walled to provide insulation for the steam-bitumen mixture, operating at 100 degrees C, over the 10-kilometre distance, he said. It ran at a pressure of 1,000 kilopascals, about 145 pounds per square inch.

Ron Bailey, senior vice-president of Nexen’s Canadian operations, point to a picture of the pipeline oil spill near the Long Lake oilsands operation.

He said the company doesn’t know what happened to the line or the monitoring equipment and can’t comment on causes until the pipeline experts it has hired have completed their investigations. He said Nexen doesn’t know when the pipe began leaking.

In a conference call from the Canadian premiers meeting in Newfoundland on Friday, Alberta Premier Rachel Notley said the spill must be rigorously investigated and must result in clear recommendations to reassure the public about pipeline safety.

“We’re going to get, I think, public trust from identifying what went wrong and then ensuring we find ways to fix it,” she said.

“We know, statistically, that pipeline incidents and pipeline leaks are decreasing as more and more older pipelines are decommissioned but we also know that we can do better.”

The break in a relatively new pipe and the failure of leak detecting systems are a concern, said Vern Janvier, chief of the nearby Chipewyan Prairie Dene First Nation, who added he remains generally a supporter of the oilsands industry for its economic benefits.

“It’s hard to see spills, though, right?” he told the Herald in an interview.

He said the leak occurred in a area that is open to the public but that local people avoid because of its high level of industrialization, with Long Lake, Enbridge Inc. pipeline and storage facilities and the neighbouring Surmont thermal oilsands project operated by ConocoPhillips.

“The way it was explained to me, this spill is contained within the right-of-way, a really level clay surface except on the end where there’s some muskeg,” said Janvier.

“There was a spill last year with Enbridge into a creek right on a hill and that one, even though it was smaller in size, I still think it made a lot more mess and was a lot harder to clean up.”

In a news release, the Athabasca Chipewyan First Nation said it is concerned that current poor environmental standards and increasing development in the region will only result in more spills and incidents. Its lands are centred on Fort Chipewyan, 250 kilometres north of Long Lake.

A photograph showing the pipeline spill was on display as Nexen Senior Vice-President, Canadian Operations Ron Bailey provided an update regarding the pipeline failure near Nexen’s Long Lake facility

Meanwhile, Bailey said overall production at the Long Lake oilsands facility is down about 20 per cent.

The plant, opened in 2008, has never come close to its nameplate capacity of 60,000 barrels per day of upgraded oil from 72,000 bpd of raw bitumen.

The burst pipeline connected new steam-assisted gravity drainage well pads at an expansion area called Kinosis opened last year to the upgrader at the main Long Lake site, about 35 kilometres southeast of Fort McMurray.

Bailey said despite the addition of 9,000 bpd from Kinosis, the project was producing just 35,000 bpd of upgraded crude from about 50,000 bpd of bitumen. He said the upgrader was recently restarted after a maintenance turnaround and will continue to produce from wells in the original area of the lease.

The Alberta Energy Regulator has said it will remain on site to oversee the cleanup. It said it is requiring Nexen to implement a wildlife protection plan in the area.

John Bennett, national program director of the Sierra Club Canada Foundation, told the Canadian Press he was worried.

“We’re always concerned when petroleum products get spilled into the environment. There’s always damage, and it’s usually permanent of some nature,” said Bennett. “It’s full of toxic elements that should not be released into the environment.”

The Nexen spill is one of the bigger ones in recent years. In March, the AER investigated a spill of about 2.7 million litres of condensate at Murphy Oil’s Seal oilfield in northwestern Alberta. Condensate is used to dilute heavy oil so it can flow through pipelines.

In 2011, about 4.5 million litres of oil leaked from a Plains Midstream pipeline into marshlands near the northern Alberta community of Little Buffalo. A year later, about half a million litres of oil spilled from another Plains pipeline in central Alberta.

dhealing@calgaryherald.com

Twitter.com/HealingSlowly

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