Oilsands industry adds diluent supply to wildfire woes

, Investment

The wildfire that's obliterated sections of Fort McMurray and forced the evacuation of more than 80,000 people has knocked out an estimated 1 million barrels of daily production from the oil-sands region.

A raging wildfire in Northern Alberta has dealt oil-sands operators another complication: local shortages of diluent, the light oil needed to get Canada’s heavy crude flowing.

Statoil ASA said Monday that it shut its Leismer oil-sands plant south of Fort McMurray, Alberta, after diluent deliveries were cut off. Husky Energy Inc. also cited a shortage of diluent May 4 when it cut its Sunrise oil-sands site’s output by 20,000 barrels a day.

Alberta’s oil-sands operations make bitumen, a type of crude that’s too thick to flow through pipelines. Producers bring in diluent on pipelines, mix it with the bitumen, and ship the blended oil back out to market. When workers were evacuated from the area around Fort McMurray last week, some of the pipelines were forced to shut down.


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