Oilpatch lawsuit plays blame game over pipeline failure by Claudia Cattaneo | July 8, 2015 10:43 AM ET
Contractors claim Canadian Natural moved emulsion at temperatures beyond the pipeline’s design capacity for extended periods.
….a massive lawsuit making its way through the courts in Alberta provides the down-and-dirty of the way companies deal with each other when things go wrong. [And how Encana deals with communities when the company contaminates their drinking water supplies?]
The lawsuit involves Canadian Natural Resources Ltd., Canada’s largest independent oil and gas company, and three oil services heavyweights — Flint Field Services Ltd. (owned by San Francisco-based engineering firm URS Corp.), Toronto-based ShawCor Ltd., and IMV Projects Inc. (owned by U.K. based Wood Group) — over who is to blame for the failure of a high-temperature pipeline that is part of the expansion of the oil producer’s Primrose/Wolf Lake heavy oil project in northeast Alberta.
… The lawsuit, first launched in 2010 and last amended in April 2015, has grown a thick court file, ensnared dozens of witnesses, involved more than 100 days of discovery, and is scheduled for a three-month trial starting in April 2016 at the Alberta Court of Queen’s Bench.
The lawsuit will be closely watched due to the names involved and as a case study on how companies pass the buck at a time of zero tolerance for bad practices. [Like Encana blaming bacteria for the community-wide drinking water contamination caused by Encana’s super bad (and illegal) practices fracturing Rosebud’s drinking water supplies?]
Canadian Natural is seeking $68 million in damages from companies that provided the 32-kilometre pipeline’s coating, insulation system, engineering services and construction work.
For their part, the service providers say the suit is without merit and that Canadian Natural has only itself to blame for a failure that resulted from its own actions.
Installed in 2008, the buried pipeline was unique in Western Canada because it was meant to carry emulsion materials at very high temperature — up to 160 degrees Celsius. Canadian Natural claims the pipeline’s coating didn’t hold up as expected, leading to “hot spots” along the line, coating that deteriorated and lost its integrity. The company said the whole system has to be replaced. “The … coating had degraded extensively and was no longer capable of providing an adequate thermal insulation for the surrounding environment or meeting design requirements,” Canadian Natural alleges. “The design of the insulation system was flawed and unsuitable for the pipeline as constructed.” The oil producer claims the contractors hired unqualified personnel, provided the wrong advice, used inferior materials, and failed to do adequate testing or to meet minimal trench requirements.
“The defendants misconduct particularized herein was unconscionable, particularly given the public interest in ensuring that the oil and gas pipelines operate safely and in an environmentally responsible fashion,” Canadian Natural claims. [!!!]
But the contractors claim Canadian Natural moved emulsion at temperatures that were beyond the pipe’s design capacity for extended periods.
“Any losses or damages to the pipeline, as alleged by CNRL or at all, were caused by CNRL operating the pipeline continuously at temperatures in excess of 140 degrees Celsius and 160 degrees Celsius, due to a well blowout,” in early January, 2009, alleges IMV, which designed it. The blowout forced the company to cease steaming and push high temperature emulsion into the pipeline, which caused the damage, IMV alleges.
ShawCor, which provided the pipeline’s coating, says it met all the specifications and if the pipeline failed it’s because Canadian Natural was negligent.
Flint, hired to do construction work related to the project, including building the pipeline’s trench, alleges “The damage to the coating system of the pipeline arose from or was contributed to by the improper use and operation of the pipeline by the plaintiff, for which the plaintiff is solely responsible.”
Canadian Natural’s Primrose problems didn’t stop there. The company had several bitumen leaks in 2013, resulting in an Alberta Energy Regulator investigation and lots of bad publicity as it struggled to contain them. [STRUGGLED? ACCORDING TO THE REGULATOR, CNRL HASN’T CONTAINED THE LEAKS YET] In that case, CNRL attributed the spill to failed wellbores in abandoned wells, caused by faulty cement jobs or separated casings.
The AER was due to conclude its investigation on the causes of the spill late last year, but spokesman Bob Curran said the regulator has yet to complete its own analysis of reports by the company and by a third party. There is no set date for a conclusion, Curran said. [Protti slowing the analysis up? For how many decades? When will Protti and his enabling AER shut CNRL down at Primrose until the aquifers are cleaned up, and the caprock unfrac’d and brought back up from hell?]
Some excellent comments: