Imperial Oil Ltd. on Sept. 2 said it had shut all production at its 220,000 barrel-per-day (bbl/d) Kearl oil sands site in Canada due to an outage of part of the Polaris diluent pipeline following a leak.
Timing to restart production is unknown, the company said in a release. Imperial is majority owned by U.S. major Exxon Mobil Corp.
The pipeline supplies ultralight oil from Edmonton, Alberta, to oil sands sites to be blended with bitumen for transport.
Inter Pipeline, which owns Polaris, detected a leak on its system Aug. 29 and identified the source by Aug. 31, shutting down a segment of Polaris. It reported to the Alberta Energy Regulator a spill of 90 cubic meters (566 bbl) of light oil some 20 kilometers southeast of Fort McMurray, Alberta, regulator spokesman Shawn Roth said.
The impact on fish and wildlife is unclear, Roth said. The spill happened 80 meters from a wetland and one kilometer from the Clearwater River.
The outage is likely to remove 240,000 bbl/d to 270,000 bbl/d from the market for at least a few weeks, disrupting U.S. refiners, Credit Suisse said in a note.
Apart from the Imperial site, the outage on the 865,000-bbl/d Polaris line could affect operations at Husky Energy’s Sunrise oil sands facility, Eight Capital said in a note.
The shutdown does affect Husky, but the company has options to mitigate the effects, spokeswoman Dawn Delaney said, without elaborating.
The discount on Canadian heavy oil to West Texas Intermediate dipped by 35 cents per barrel to $9.55, reflecting stronger Canadian prices due to reduced supplies.
Inter Pipeline declined to comment. It said on Aug. 31 that cleanup was underway.
Recommended Reading
Williams CEO: Louisiana Energy Gateway Start Temporarily in Limbo
2024-03-21 - Williams CEO Alan Armstrong said the project still moving forward after hitting a snag in a dispute with Energy Transfer but lacks a definitive start date.
Energy Transfer Asks FERC to Weigh in on Williams Gas Project
2024-04-08 - Energy Transfer's filing continues the dispute over Williams’ development of the Louisiana Energy Gateway.
Waha NatGas Prices Go Negative
2024-03-14 - An Enterprise Partners executive said conditions make for a strong LNG export market at an industry lunch on March 14.
Wayangankar: Golden Era for US Natural Gas Storage – Version 2.0
2024-04-19 - While the current resurgence in gas storage is reminiscent of the 2000s —an era that saw ~400 Bcf of storage capacity additions — the market drivers providing the tailwinds today are drastically different from that cycle.
Pembina Pipeline Enters Ethane-Supply Agreement, Slow Walks LNG Project
2024-02-26 - Canadian midstream company Pembina Pipeline also said it would hold off on new LNG terminal decision in a fourth quarter earnings call.