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Canadian Natural sheds light on cause of upgrader fire

CALGARY — A fire likely broke out at Canadian Natural Ltd.’s Horizon upgrader in northern Alberta earlier this year because a valve opened that shouldn’t have, the company’s chief operating officer said Tuesday.

CALGARY — A fire likely broke out at Canadian Natural Ltd.’s Horizon upgrader in northern Alberta earlier this year because a valve opened that shouldn’t have, the company’s chief operating officer said Tuesday.

“A series of things had to happen for that valve to open,” Steve Laut told reporters at the company’s investor open house.

Upgraders are multibillion-dollar complexes that convert tar-like oilsands bitumen into a lighter type of crude refineries can handle.

The January blaze, in which five workers were injured, took place in the upgrader’s coker, which houses two pairs of coking drums to heat the bitumen.

“The wrong drum got opened,” Laut said.

“As you can imagine, there’s all kinds of computer locks that don’t allow you to open a drum that’s under pressure and under temperature. So those systems failed and were bypassed.”

“Even then, you should have operator discipline to make sure it doesn’t happen.”

Alberta’s Occupational Health and Safety Department is still investigating the cause of the fire.

Canadian Natural (TSX:CNQ) is reviewing its safety procedures and giving its staff a refresher course on those rules. As it rebuilds the coker, it is looking at design changes to prevent a similar event from happening again.

Repairs are expected to cost between $350 million and $450 million, which will be covered by insurance. Production is slated to start up at half-capacity next month, with the set to come back online in the third quarter.

Wildfires in northern Alberta have disrupted the repair work at Horizon, Laut said.

“Obviously we haven’t done anything yesterday, and I don’t know if we’re doing anything today, mainly because there’s a lot of smoke going through there. You don’t want to take a safety risk,” he said.

Canadian Natural shares fell three cents to $39.52 in afternoon trading on the Toronto Stock Exchange.