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Engineering firms hit with lawsuit
Two years after one of the most destructive fires in the Alberta oil sands wiped out an average 115,000 barrels per day of production over eight months, operator Suncor Energy has filed lawsuits against some of the leading engineering firms in the sector.
It is claiming C$630 million in what is thought to be the largest suit in the history of the oil sands after a blaze shut down one of two upgraders.
The defendants include Bantrel and Bechtel Group, the leading firms behind Suncor’s Millennium expansion.
Also being sued are Dacro Industries of Edmonton, Fluor Canada and Montreal-based SNC Lavalin.
The action is being taken by Suncor on behalf of its insurance companies, from whom it was awarded C$979 million to cover the loss of production following the fire on Jan. 4, 2005.
Suncor also collected C$148 million from property loss insurers to offset repairs.
Suncor: fire started in nozzle Suncor alleges in its statement of claim that the fire originated with one of two nozzles connected to a fractionator that holds bitumen, heavy oil and natural gas at a temperature of about 380 degrees Celsius and separates the oils.
It claims the defendants should have known that the nozzle was not, as it should have been, clad and lined with stainless steel.
As a result, severe corrosion, erosion and thinning of the nozzle occurred, creating a “substantial risk of fire.”
But the engineering firms failed to warn Suncor of the “dangerous defect,” Suncor claimed.
In earlier oil sands related lawsuits, Shell Canada and its partners were paid C$220 million for loss of profit stemming from a 2003 fire that affected start-up production at its Athabasca project for four months.
—Gary Park
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