File OF-Surv-Inc-2012 14301
19 July 2013
Ms. Jen Watson
Norman Wells Operations
Imperial Oil Resources
1001 Canol Drive
Norman Wells, NT X0E 0V0
Dear Ms Watson:
Imperial Oil Resources Ltd. (IORL) Pipeline Leaks at the Norman Wells Production Facility
The National Energy Board (the Board) directs IORL to submit a formal Corrective Action Plan (CAP) to mitigate the risk of a spill for all the 77 pipelines (66 oil emulsion, 9 produced water and 2 produced gas pipelines) mentioned in Table 1 of IORL's 1 February 2013 Normal Wells Pipelines Risk Management Review. The CAP shall include a completion timeline and justification for the prioritization of the work to be completed. Attached is Order CO-001-2013.
In 2011-2012, four oil emulsion pipelines, listed as M-43X, E-33-1X, O-18X, and Q-06X, forming part of IORL's gathering system leaked due to external corrosion. Following the most recent failure of pipeline Q-06X in October 2012, Board staff met with IORL to gather further information on the causes of the recent failures and to discuss IORL's plans to prevent reoccurrence. IORL indicated the leaks have occurred on pipelines constructed in the 1980s which share in common a coating system that was applied outside of clamshell insulation over bare steel pipe. IORL also indicated that water ingress can occur at the shrink sleeves installed over the clamshell insulation at girth welds and can cause external corrosion of the pipe.
IORL filed with the Board a copy of the Norman Wells Pipelines Risk Management Review dated 1 February 2013. Table 1 of this document indicates that there are 77 pipelines constructed in the 1980s that have the same coating and insulation design as the ones that leaked as mentioned above. On 28 March 2013, IORL provided a preliminary mitigation plan including abandonment, replacement and in-line inspection for 61 of the 77 pipelines in question, noting that the recommendations were subject to adjustment as plans progressed.
The proposed mitigations identified by IORL for the 61 pipelines contained in the preliminary mitigation plan appear to be adequate. However, IORL has not provided a plan for the other 16 lines also constructed in the 1980s and with the same coating and insulation design. In addition, the plan is informal at this point and does not provide a completion timeline.
The safety of Canadians and protection of the environment are the Board's top priorities. The Board requires companies to anticipate, prevent, manage and mitigate potentially dangerous conditions associated with their facilities.
Secretary of the Board
IN THE MATTER OF the Canada Oil and Gas Operations Act (the Act) and the regulations made thereunder, and
IN THE MATTER OFImperial Oil Resources Ltd. (IORL) pipeline leaks at the Norman Wells Production Facilities filed under File OF-Surv-Inc-2012 14301.
BEFORE the Board on 18 July 2013.
WHEREAS the Board regulates the operation of the IORL production facilities in Norman Wells, Northwest Territories under the Canada Oil and Gas Operations Act;
AND WHEREAS in 2011 and 2012, there was an oil emulsion leak in each of the pipelines identified as M-43X, E-33-1X, O-18X, and Q-06X;
AND WHEREAS in Table 1 of IORL's 1 February 2013 Normal Wells Pipelines Risk Management Review, IORL identified 77 pipelines (66 oil emulsion, 9 produced water and 2 produced gas pipelines) constructed in the 1980s with the same coating and insulation design as the four emulsion pipelines that leaked in 2011 and 2012;
AND WHEREAS IORL has provided a preliminary mitigation plan on 28 March 2013 including abandonment, replacement and in-line inspection for 61of the 77 pipelines;
AND WHEREAS subsection 25(a) of the Canada Oil and Gas Drilling and Productions Regulations, SOR/2009-315 requires that operators ensure that all wells, installations, equipment and facilities are designed, constructed, tested, maintained and operated to prevent incidents and waste under the maximum load conditions that may be reasonably anticipated during any operation;
NOW THEREFORE, pursuant to subsection 5.32 (a) of the Act, the Board hereby orders IORL to do the following:
Issued the 19th day of July 2013.
NATIONAL ENERGY BOARD
Secretary of the Board