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Alberta pipeline disrupted by fire season

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World Pipelines,

Bloomberg have reported that wildfire season in Alberta began with a blaze that cut power to a key pipeline in the oilsands, causing heavy crude prices to surge.

Inter Pipeline Ltd is in the process of restoring service to parts of its Polaris Pipeline system after power was cut to the line’s Lamont Station on May 13, the company announced this week. The line, which carried 194 000 bpd last year, supplies light oil from the Edmonton area to the Athabasca and Cold Lake areas of Alberta, where it is used to dilute bitumen so that the heavy crude can flow freely through pipelines to refineries.

Following the disruption, heavy Western Canadian Select’s discount to West Texas Intermediate crude shrank by US$1.75 to US$13.5/bbl, the narrowest since October. The discount for Edmonton C5 condensate, a common form of diluent, widened US$0.30 to US$1.7/bbl, the widest since January.

Wildfires are common in Alberta in the spring and summer months, with a devastating one in 2016 burning down entire sections of the town of Fort McMurray and causing the shutdown of more than 1 million bpd of oilsands production.

Osum Oil Sands Corp. said its operations were not affected by the disruption to Polaris and Cenovus Energy Inc. said business was normal. Canadian Natural Resources Ltd declined to comment. Suncor Energy Inc. and Imperial Oil Ltd have not yet supplied a comment.

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