Alberta Wildfires Shut Down 24 Shell Gas Wells

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By Irina Slav, Oilprice.com

Wildfires raging in southwestern Alberta have prompted Shell to shut down 24 natural gas wells and pipelines around them, Canadian media reported, adding that other companies, including Questfire Energy and West Lake Energy, were also shutting in gas-producing facilities.

Shell’s Waterton sour gas processing complex remains in operation for the time being, but the company has a contingency plan to shut it down if the fires approach it, a Shell spokesman told media. The company, however, has reduced staff numbers at the site, including in the field and the processing plant, and has prepared plans for their evacuation in case the flames come too close.

The Waterton facility has a processing capacity of 179 million cu ft of sour gas daily, and produces methane, ethane, propane, butane, and condensate.

The wildfire, according to the latest data from Alberta authorities, had grown by 33,000 hectares since Monday and was still beyond control as of early morning today. One local official said the fire is likely to remain out of control for some time, although forecasts of wet weather moving in suggest this may happen sooner rather than later.

Last year, another wildfire near Fort McMurray crippled the Alberta oil industry for several months, reducing crude oil production due to field and processing facility shutdowns.

Alberta accounts for the bulk of Canada’s crude oil production and for 68 percent of Canada’s natural gas production. Earlier this year, Shell, along with other Big Oil players in the oil sands, sold most of its Canadian operations but retained the Waterton gas complex and a few other assets in the country.

Although the divestiture was mainly aimed at reducing Shell’s massive debt pile that followed the acquisition of BG Group, coupled with the other asset sales it sparked worry that Big Oil was turning its back on the Alberta oil sands as it sought lower-cost, quicker-return opportunities in U.S. shale.

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