CNRL targets oil sands upgrader restart

By OGJ editors
HOUSTON, Feb. 15 -- Canadian Natural Resources Ltd. (CNRL) said the upgrader coke drums damaged in a fire on Jan. 6 at its Horizon oil sands facility in northern Alberta may resume operations in the second and third quarters.

Its preliminary target for restarting Coke Drums 2A and 2B is the second quarter. This would allow the upgrader to produce 55,000 b/d of synthetic crude oil, which is half of the plant's capacity. Its target for restarting the remaining two coke drums (1A and 1B) is the third quarter.

CNRL said its internal investigation team has determined that the fire resulted from opening the top unheading valve on an active low-pressure coke drum. This allowed the release of hot hydrocarbons within the coker cutting deck building, which was followed by ignition and the fire.

Its investigation team is continuing to establish the how and why such an event occurred and plans to complete its findings in March.

To date it has determined that:

• The coke drums appear to be serviceable.

• Instrumentation to many areas of the plant remains intact.

• Damage to the derrick structure over Coke Drums 1A and 1B appears to be minimal, but will require the derrick to be replaced.

• The limited damage to the rails that guide the cutting tools over Coke Drum 2B will require repair before Coke Drums 2A and 2B can be restarted.

• Damage to the structural beams supporting both derrick structures over the coke drums will require limited repair or replacement.

• The control station used for cutting of Coke Drums 1A and 1B will need to be replaced.

• Pipe work above the coke drums will require inspection and testing (x-ray and or pressure testing) to determine if certain pipe sections need to be replaced.

• Collateral freeze damage occurred after the fire. Some pumps and more importantly, the air coolers and furnace tubes associated with the coke drum operation will require extensive repair or replacement.

CNRL initiated material and equipment orders in January to replace components above Coke Drums 1A and 1B. It plans to use any excess material not needed for repair in the future expansion that includes the installation of Coke Drums 3A and 3B.

The company said it has not determined a detailed cost estimate for the repair and rebuild, although it believes that costs will not exceed $250 million. The company has insurance to cover the cost of the repair and rebuild, as well as, business interruption insurance subject to a waiting period, to alleviate ongoing operating costs thereby mitigating financial impacts of the incident.

CNRL also will undertake opportune maintenance of the facility during the shutdown. The maintenance includes:

• Bringing forward maintenance activities related to a 5-day outage originally targeted for April.

• Bringing forward about 25% of a turnaround planned for 2012, including required regulatory inspections of equipment.

• Determining the feasibility of accelerating more of this work forward, given the better understanding of timelines to the restoration of production.

• Implementing projects to reduce belt wear and increase vibrating screen reliability in the bitumen production plants.

CNRL said the Horizon expansion continues with the construction and commissioning of the third ore preparation plant along with the associated hydrotransport pipelines schedule for completion in the fourth quarter. It also said engineering work for the expansion as originally targeted for 2011 also continues on schedule.