Follow-up article from a recent MATCOR Blog Posting: A pipeline which caused the largest oil spill in Alberta since the 1980s likely will remain out of service until the end of June, said operator Plains All American Pipeline.
The parent of operator Plains Midstream Canada said Thursday dig operations to check pipeline integrity along the northern portion of the 187,000 barrel per day line Rainbow pipeline will continue until at least the end of the month.
The line, which runs from Zama to Edmonton, has been shut down since rupturing late April near Little Buffalo in northwestern Alberta. At least 28,000 barrels of crude were spilled into boggy muskeg, flowing to a beaver pond where it was contained.
The rupture was caused by soil settlement after a maintenance program that allowed a section of the pipeline sag, according to initial reports. Plains was ordered by the Alberta Energy Conservation Board to check along the entire portion of Rainbow’s 20-inch line, from Zama to Nipisi in north-central Alberta, as part of the restart plan. The extended program came after the operator found a crack on a weld seam approximately 25 kilometres south of the original break.
“We asked them to do two dig programs and we are waiting for the results of the programs,” said Kim Blanchette, spokeswoman with the ERCB on Thursday.
After the April 29 spill, Plains identified five areas that has similar maintenance to the failure site, Blanchette said. The discovery of a crack downstream of those areas prompted the regulatory to call for a second, random dig program.
Plains said its digs were going slowly due to the remote locations of the sites, as well as the forest fire threat and bad weather.
“We are working to complete the remaining digs by the end of June,” the company said in an e-mail. It said it did not have a firm timeline for the restart of the line.
Plains said it expects repair and remediation costs of the Rainbow pipeline to range from $64 million US to $75 million US, with insurance covering the bulk of the expense.
Also on Thursday, the Houston-based company said it expected to “meet or exceed the high end” of its second quarter guidance for adjusted earnings of $290 million US to $320 million US
Operations on Rainbow’s 24-inch line from Nipisi to Edmonton started soon after the spill was detected, then interrupted for 10 days after forest fires caused power failures in the region.
The outage of the pipeline’s southern leg prevented delivery of about 150,000 barrels a day of heavy crude to the Edmonton, Alberta, refining and pipeline hub.
The northern section of Rainbow, which was built in the 1960s, carries mostly conventional crude from northern Alberta fields. It was moving about 75,000 barrels a day at the time of the rupture.
In May Enbridge Inc. also reported a major leak on its Norman Wells oil pipeline, which feeds directly into the Rainbow line. The spill, in a remote location of the Northwest Territories, could be as large as 1,500 barrels, Enbridge recently disclosed.
The 39,400 barrel per day line flows oil from Imperial Oil’s processing facility in Norman Well, NWT to Zama. Imperial had to reduce production on the Rainbow outage. When the Enbridge line started flowing again at reduced capacity, the company was able to add some barrels to the pipeline.
“That’s helping but it’s not resolving the situation for us,” said Imperial spokesman Jon Harding. “It is status quo.”
Imperial has been storing production at Norman Wells, increasing storage capacity by re-certifying tankage left over from the sites days as a refinery, Harding said. Other volumes are flowing to Zama, where it is being trucked to market.
The outages have had minimal impact on cash crude prices, traders said, but come at a time when several ruptures and leaks in pipelines carrying Canadian oil have raised questions about reliability and safety.
Since the Rainbow spill, TransCanada Corp. suffered two leaks and outages on its 591,000 barrel a day Keystone pipeline to Oklahoma from Alberta due two faulty equipment in pump stations.