Wildfires in Canada shut down oil, gas production

Robert Tuttle and Esteban Duarte, Bloomberg May 08, 2023

(Bloomberg) — Wildfires burning across the Canadian province of Alberta have prompted the evacuation of almost 30,000 residents and the shut down of oil and natural gas wells and pipeline systems.

A total of 109 blazes were burning as of late Sunday, 30 of which were classified as out of control, and a provincial state of emergency has been declared. Evacuation orders have been issued for communities, including some less than 100 kilometers (62 miles) west of the provincial capital, Edmonton.

The fires are affecting energy production in the region, which accounts for most of Canada’s hydrocarbon exports. One community under evacuation order as of Sunday was Fox Creek, a major center for light oil and gas drillers. Energy facilities were also being evacuated in Grande Prairie along with local residents, provincial officials said.

Unlike the massive wildfires of 2016, which were concentrated in the northeast of Alberta and forced the shutdown of more than 1 MMbpd of oil sands production, the worst-hit areas this year are in the province’s west. There, operators drill into rock formations including the Clearwater, Montney and Duvernay. The area includes gas processing plants and is crisscrossed by pipelines.

Paramount Resources Ltd. has shut about 50,000 boed of production as of May 5 as a precaution and because of disruptions to third-party infrastructure, the company said Sunday. Its operations in the Grande Prairie and Kaybob regions are being affected.

Pipeline operator TC Energy Corp. halted two compressor stations on its Nova Gas system nearest to active wildfires, the company said in an email Sunday. Other sections of the system and other networks continue to operate safely. The company is keeping workers away from facilities near active blazes unless necessary.

Tidewater Midstream & Infrastructure Ltd. shut its Brazeau River Complex, a gas processing facility, west of Edmonton and evacuated all personnel, the company said in an email. Cenovus Energy Inc. has shut down some production and halted plants in some areas, a company spokesperson said.

The government-owned Trans Mountain Pipeline, the sole link carrying Canadian crude to the Pacific coast, is still in operation but the company has deployed mitigation measures, including a perimeter sprinkler system at its Edson pump station, and is ready to deploy additional protection measures if needed, the company said.

Tamarack Valley Energy Ltd. had to shut in less than 300 bpd of production after the gas processing plants operated by Tidewater and another run by Keyera Corp. went out of operation due to the blazes, Chief Executive Officer Brian Schmidt said by phone. Pembina Pipeline Corp. also said it evacuated some workers west of Edmonton.

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