Oil fields closed in Norman Wells
Minister says he doesn't expect layoffs in the short-term
Shane Magee
Northern News Services
Monday, January 30, 2017
LLI GOLINE/NORMAN WELLS
Imperial Oil is suspending production at its oil field in the Norman Wells area due to the continued shutdown of Enbridge's Line 21 pipeline that transports oil south.
"We have been operating at a minimal operation status. So what has changed is Imperial plans to perform a safe shut down of the Norman Wells operation, likely in February," Lisa Schmidt, a spokesperson for Imperial, said in an interview Jan. 26.
"This is a result of the Enbridge Line 21 pipeline (being closed) which is the only available transportation option for oil that's produced at the site."
With the pipeline not operating, storage facilities in the community are filling up. The field produced about 11,000 barrels of oil per day in 2015. Imperial employs about 60 people in day-to-day operations in the community.
Schmidt said the company is carrying out maintenance activities related to the shutdown procedures.
"We're still working to explore options after shut down occurs. I don't really have any additional details on that – we're still working on options," she said when asked about the impact on employees.
Industry, Tourism and Investment Minister Wally Schumann doesn't expect layoffs in the short-term.
"Everyone is still going to be working – that's my understanding – and we're going to keep an eye on the situation," said Schumann, who also said knows it will be a challenging and stressful time for the community.
Norman Wells Mayor Nathan Watson said residents are probably the least surprised about the news.
"It's a continuation of the slow and steady decline," Watson said, referring to changes that started hitting the community when oil prices began plunging two years ago. The most immediate impact will likely be on small businesses in the community, he said.
"We hope to have the field producing and back up as soon as possible," Watson said. "It's still a producing field, there's still years of life left in it. The problem is they can't get the oil out."
Imperial began reducing production last fall after Enbridge shut down the Norman Wells pipeline, also known as Line 21. The pipeline runs 869 kilometres from Norman Wells to Zama, Alta. with a capacity of 50,000 barrels of oil per day.
It was shut down in mid-November because of concerns about riverbank slope stability concerns near where the pipeline goes under the Mackenzie River in the Fort Simpson area.
Enbridge removed product from the segment of the line under the Mackenzie River. There's no estimated date for the restart of operations.
Enbridge plans to use horizontal directional drilling to tunnel several meters under the river bed and then pull pre-assembled pipe through the tunnel, Enbridge's northern region manager stated in a Jan. 12 letter to the Mackenzie Valley Land and Water Board.
The company is in the early stages of planning and hasn't finalized a timeline or scope of work, the letter states. Surveying and borehole drilling is expected to occur into February on both sides of the river and on the river ice to gather information for planning the next stages of work.
The Imperial oil field also produces natural gas used by the company to generate power, which is then sold to the Northwest Territories Power Corporation for distribution in Norman Wells. The power corp. has a back-up diesel generation plant.
The back-up facility is regularly tested and has the capacity to supply all of its customers in the community at any time, power corp. spokesperson Pam Coulter stated in an e-mail last week.
Watson said the community has been assured of a smooth transition to diesel generation and that there's a sufficient fuel supply.
"There's no plans to impose any increase to our rates our zone in the short-term," Watson said.
Last year Imperial announced it intended to try and sell its Norman Wells assets.
