A target date for returning the upgrader to full service has not been set.
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According to Bloomberg, Nexen will cut jobs at its Long Lake facility and at its Calgary office after determining that an upgrader at Long Lake can’t be repaired in the short term. About 350 employees will be laid off by December 31, Nexen executives told reporters at a news conference in Calgary on July 12.
Alberta regulators’ investigations continue regarding the two incidents.
In the beginning of this year, a hydrocracker exploded in the upgrader, killing two employees.
“We are facing extremely tough market conditions since mid-2014 and it’s tough for the whole industry”, Fang Zhi, chief executive officer of Nexen, said on the call.
The company says the explosion was the result of work being performed outside the scope of approved work activities.
Nexen Energy is to lay off a total of 350 workers at Long Lake and the Calgary headquarters throughout this year. “Moving to a [steam-assisted gravity drainage]-only operation in the interim is entirely an economic decision”.
The first incident happened in June 2015.
“The root cause of the rupture was a thermally driven upheaval buckling of the pipeline and the subsequent cool down during the turnaround”, Nexen executives said. “Steps that could have been taken to mitigate the potential for upheaval buckling were not addressed”.
Nexen did however release details of its separate investigation into a pipeline leak at the same oilsands site last July that spilled about five million litres of bitumen, sand and produced water over a 16,000-square metre area.
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Most likely, it was the result of an incompatible pipeline design.
