Damage 'limited' after Deep Panuke fire1/25/2013
Encana downplayed the impact Thursday of last weekend’s fire at its Deep Panuke natural gas project off Nova Scotia’s coast.
Helicopters lifted 46 non-essential personnel off the production platform owned and operated by SBM Offshore after the fire broke out Saturday in an electrical panel. Another 69 people remained on the platform.
“First and foremost, no one was hurt,” Mike McAllister, who heads Encana’s Canadian division, told an institutional investors conference in Whistler, B.C.
The fire was on a switch gear associated with the production platform’s heat-tracing system, he said. Heat-tracing is meant to combat ice buildup on platforms.
“It was just one panel (that) was damaged, and so the damage was limited, if you will,” McAllister said.
“A root-cause analysis is being done to make sure they understand … what was the specific cause there so we don’t repeat it. But the team was talking about the impact on schedule — it might have about one-week impact in terms of startup.”
He didn’t address the issue of fire-suppression systems that failed to work properly during the incident, forcing firefighters on the platform to put it out themselves.
“That’s part of the overall investigation,” said Encana spokeswoman Lori MacLean.
News of the fire “got all over the street” earlier this week, said Phil Skolnick, an analyst with Canaccord Genuity in New York.
“It’s like a plane crash, when they happen, you hear about it all over the place.”
Skolnick couldn’t say if the one-week-delay estimate is realistic.
“Who knows? This is a project that’s been plagued significantly by schedule delays.”
Deep Panuke, about 250 kilometres southeast of Halifax, was originally slated to produce first gas in 2010. But it has faced a series of delays.
“SBM has announced that they’re looking at the first half of this year as when that project will come on,” McAllister said.
“We’ve built contingency into our Panuke estimates for this year. I think we had planned and budgeted 162 million (cubic feet) a day annualized average. That’s still in the window in terms of when we think the platform will start up and the work is progressing.”
Last summer, Encana estimated Panuke could produce 300 million cubic feet of gas daily. At the time, the natural gas giant predicted it would come online with four deep-sea wells, with initial production of about 200 million cubic feet per day.
“You’re just estimating when production will start,” MacLean said of the difference between last year’s prediction and the annualized one McAllister delivered Thursday.
“SBM has said the first six months of 2013 for the start of production.”
Tanya Taylor White, spokeswoman for the Canada-Nova Scotia Offshore Petroleum Board, confirmed the investigation into Saturday’s fire is still underway.
Encana’s still waiting for the green light from the board “to begin ramping up again,” MacLean said.
Non-essential personnel lifted off the platform Saturday haven’t returned, she said.
Documents obtained last month by The Chronicle Herald show that last May SBM prepared an operational readiness audit of electrical equipment in hazardous areas that identified more than 10,000 pieces of gear that needed to be reinspected before Deep Panuke could begin producing natural gas.
SBM said it has acted on that recommendation.
“The constraints that you have in commissioning a platform offshore is your pace at which you can get work done,” McAllister said Thursday.
“We’re restricted to 118 people on board. And so that kind of dictates the pace in terms of the work they can get done and how quickly the systems get turned over to operations.”
(The Chronicle Herald)