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Alliance Pipeline Shut Down Causes Production Disruption for Producers

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Alliance Pipeline Shutdown Update

Alliance Pipeline has begun shutting down its pipeline system as it prepares to begin flaring activity in order to evacuate an amount of H2S that entered the pipeline from an upstream operator. The H2S has been isolated in a section of the Alliance mainline where it will safely remain until it is removed through the flaring process.

Flaring is planned to happen at Alliance's Alameda compressor station in Saskatchewan, as well as at a mainline block valve upstream from the Alameda station. The second location has been added as a measure to more effectively flare the H2S and minimize the duration of the shutdown. Flaring will commence as soon as it is safely possible.

Landowners and local officials in the vicinity of the planned flaring sites have been notified.

Daniel Sutherland, Vice President, Commercial Operations said: "Alliance is committed to resolving this matter as soon as possible in order to minimize the disruption for our customers.  As always, safety remains our top priority and all of our activities will adhere to strict safety protocol."

Alliance Pipeline expects the shutdown to last for several days. A more precise timeline will be communicated when the mitigation plans are finalized.

Production Disruptions: 

Athabasca Oil Corporation

Athabasca Oil Corporation was informed by Alliance Pipeline of the shutdown of its mainline pipeline system late last week. Alliance advised shippers Thursday evening that an amount of hydrogen sulfide (H2S) entered into its mainline pipeline as result of complications experienced by an upstream operator. Alliance has declared this to be a force majeure event.

Athabasca has shifted a portion of its regional Kaybob production to the SemCAMS KA plant and TCPL system, however approximately 4,200 boe/d of the Company's Light Oil production is currently impacted. While Alliance has not provided guidance for resumption of service on the system, the current expectation is for service to be returned this week. For reference, five days of downtime would have an approximate 250 boe/d impact on Athabasca's third quarter Light Oil production guidance of 5,000 boe/d. The Company reiterates its 2015 corporate exit guidance of 10,000 - 14,000 boe/d. Athabasca will provide updates as additional information becomes available.

Crew Energy Inc.

Crew Energy Inc. has been informed by Alliance Pipeline that an operational event on its system has resulted in Alliance requiring natural gas suppliers to suspend pipeline injections. While Alliance has not provided guidance for resumption of service on the system, the current expectation is for service to be returned in three to four days.

Alliance directed Crew to suspend injection into the Alliance Pipeline by 9:00 AM on Friday, August 7, 2015. This suspension will result in a deferral of essentially all of Crew's Montney production, approximately 60 mmcf per day of natural gas and associated liquids, until the situation is resolved. We are working to mitigate a portion of the lost service however, with ongoing service outages on other pipelines in the region, limited options are currently available. The temporary outage should not affect the continued commissioning of Crew's new West Septimus facility or the completion of the Lease Automatic Custody Transfer unit tie-in and will allow the Company to conduct minor maintenance on the existing Septimus facility.

NuVista Energy Ltd

NuVista Energy Ltd. has been notified by Alliance Pipeline that an operational event has caused the pipeline company to call for all producers into the Alliance pipeline to suspend injections for an indeterminate period of time.

As a result, NuVista has suspended approximately 8,000 Boe/d of production from our 3-36 Bilbo compressor station for an indeterminate period of time. Alliance Pipeline advised shippers Thursday evening that an amount of hydrogen sulfide (H2S) entered into its mainline pipeline as result of complications experienced by an upstream operator. Alliance has declared this to be a force majeure event.

There is no other information available at this time on the duration of the interruption, however for reference if the current impact lasts for 3 days the impact to our third quarter 2015 production would be approximately 250 Boe/d. 

Seven Generations

Seven Generations Energy Ltd. (7G) was informed by Alliance Pipeline that an operational event has caused the pipeline company to call for natural gas suppliers to suspend pipeline injections for an indeterminate period of time.

Seven Generations has been directed to suspend injection into the Alliance Pipeline on the morning of Friday, August 7, 2015. This suspension will result in a deferral of essentially all of Seven Generations' production until the situation is resolved. 7G intends to use this temporary event to conduct maintenance of its production and processing facilities.

Alliance Pipeline advised shippers Thursday evening that an amount of hydrogen sulfide (H2S) entered into its mainline pipeline system as a result of complications experienced by an upstream operator. Alliance has declared this to be a force majeure event.

Seven Generations will provide updates as additional information is available.

RMP Energy

RMP Energy Inc. was informed by Alliance Pipeline of the shutdown of its mainline pipeline system and as a result requested natural gas suppliers to suspend pipeline injections for an indeterminate period of time.

As such, RMP has been directed to suspend sales gas injection into the Alliance Pipeline commencing this morning, August 7, 2015. This temporary suspension will result in the shut-in of substantially all of RMP's production, including its light oil, until the situation is resolved. The Company intends to use this temporary outage event to conduct maintenance activities of its production and processing facilities.