Pengrowth Energy Corp. Licence No
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Investigation Summary Report 2014-022: Pengrowth Energy Corp. Licence No. P22822-048 April 2016 Investigation number: 2014-022 Responsible parties: Pengrowth Energy Corp., BA code A5R5 Field centre of origin: Slave Lake Incident location (nearest town): 09-08-094-03W5M, about 82 km NE of Red Earth Creek Contravention date: January 18, 2014 (reported date) Authorization numbers and relevant Licence no. P22822-048 legislation, regulations, and rules: ISR 2014-022 Alberta Energy Regulator Investigation Summary Report 2014-022; Pengrowth Energy Corp.; Licence No. P22822-048 April 2016 Published by Alberta Energy Regulator Suite 1000, 250 – 5 Street SW Calgary, Alberta T2P 0R4 Telephone: 403-297-8311 Inquiries (toll free): 1-855-297-8311 E-mail: [email protected] Website: www.aer.ca Alberta Energy Regulator Contents Summary of Facts ......................................................................................................................................... 1 Company Overview ................................................................................................................................ 1 Incident Overview ................................................................................................................................... 1 Investigation Findings ................................................................................................................................... 2 Failure Analysis ...................................................................................................................................... 2 Hot Oil/Water Flushing .................................................................................................................. 2 Pigging .......................................................................................................................................... 3 Leak Detection ........................................................................................................................................ 4 Reporting of the Pipeline Leak ............................................................................................................... 5 Environmental Impacts ........................................................................................................................... 5 Contraventions .............................................................................................................................................. 6 Contravention 1: Duty to Report a Release (EPEA, section 110(1)) ...................................................... 6 Contravention 2: Duty to Take Remedial Measures (EPEA, section 112(1))......................................... 6 Contravention 3: Loss or Damage to Public Land (PLA, section 54(1)(a.1)) ......................................... 6 Due Diligence ................................................................................................................................................ 7 Compliance History ....................................................................................................................................... 7 Conclusion and Recommended Counts ....................................................................................................... 7 Count 1 ................................................................................................................................................... 7 Count 2 ................................................................................................................................................... 8 Count 3 ................................................................................................................................................... 8 Investigation Summary Report 2014-022: Pengrowth Energy Corp.; Licence No. P22822-048 i Alberta Energy Regulator Summary of Facts Company Overview Pengrowth Energy Corporation (Pengrowth) is a Canadian oil and natural gas company based in Calgary, Alberta. Established in 1988, it is one of the largest of the Canadian royalty trusts, with a market capitalization of $2.4 billion in 2014. Its assets are approximately evenly distributed between oil and natural gas. The pipeline under investigation was licensed for multiphase liquids and was constructed in 1995 by Gulf Canada Resources and purchased by Conoco Canada in 1998. Pengrowth Energy Corporation bought the pipeline in January 2007 as part of a larger purchase of Conoco Canada’s Red Earth assets. Incident Overview On January 17, 2014, at 17:30 Mountain Daylight Time, a Pengrowth operator noted that no fluids were getting into the satellite battery at Legal Subdivision 1, Section 8, Township 94, Range 3, West of the Fifth Meridian, from the 09-08-094-03W5M well while trying to purge for a well test. The operator brought in a pressure truck nearby from Iron Eagle Hot Oiling Ltd. to pressure test the pipeline; however, at 19:05, Iron Eagle informed Pengrowth that the line maintained no pressure, indicating that the line had failed. Pengrowth shut in and isolated the pipeline, and activated its corporate emergency response plan. The pipeline is located at LSD 09-08-094-03W5M (09-08), about 82 kilometres northeast of Red Earth Creek. On January 18, 2014, at 13:02, the Alberta Energy Regulator’s (AER’s) Energy and Environmental Emergency Response Line received a report from Pengrowth that the pipeline failed and that about 30 cubic metres (m3), or 30 000 litres, of production fluids (emulsion) was released onto its pipeline right- of-way (ROW) and had flowed on top of an adjacent frozen slough. Pengrowth reported that the spilled emulsion on the frozen slough was contained. During the first few days of the response, it was determined that after travelling along the ROW, the released emulsion entered the slough via two ephemeral draws. The emulsion pooled on and off the ROW following surface contours and flowed both on and under the ice. The release may have caused an adverse effect to the environment and loss or damage to public land. On April 17, 2014, after reviewing its well pumping data and battery volume reports, Pengrowth revised the spill volume to 537.2 m3 and estimated that the pipeline failure actually occurred sometime on November 11, 2013. This was the day after the last successful well test and all well parameters were within acceptable range, indicating that there was not a problem with the well or the pump, but rather with Investigation Summary Report 2014-022: Pengrowth Energy Corp.; Licence No. P22822-048 1 Alberta Energy Regulator the pipeline. Pengrowth assumed that the most of the emulsion produced between November 11, 2013, and January 17, 2014, was released into the pipeline ROW and into the slough. Investigation Findings Failure Analysis The failed pipeline segment was excavated on February 18, 2014, and a 130-centimetre sample from the location where the pipeline failed was submitted to Skystone Engineering (Skystone) in Calgary for analysis. After reviewing Skystone’s failure analysis report, an AER subject matter expert concluded that several factors contributed to the pipeline rupture: 1 • During the initial construction, a field bend (also called “cold bend”) was introduced in the pipe at the location of the future failure. At this time, the pipe did not contain any kink. 0 • The operation conditions included hot flushes at 60 Celsius, which resulted in thermal expansion of the pipe. It was likely that the increasing temperature from ambient to 600C resulted in plastic deformation of the pipe at the inner curve of the bend and in the creation or deepening of the kink that contributed to the failure. Cooling from 600C to ambient temperature after hot flushes caused tensile stresses that initiated and propagated fatigue cracks. Due to the kink, cleaning pigs2 were getting hung up and required the use of hot flushes by pressure truck to push the pigs past the pipeline obstruction, which also created pressure variations within the pipeline. These repetitive tensile stresses during heating and cooling cycles initiated and propagated fatigue cracks. Skystone concluded, and the AER agrees, that the pipeline failure was caused by long-term cyclic thermal stress/fatigue due to hot flush practices done to clear the line of crystalized salt deposits and to push pigs. Hot Oil/Water Flushing Hot oil/water flushing involves pumping hot fluid into the pipeline system with a truck equipped with a pressure pump, holding tank, and boiler system. Hot oil/water flushing is considered a relatively normal procedure in the operation of production wells and pipeline systems. Due to pigs getting stuck in this line, operations staff made the decision to only send pigs down the line using pressure trucks providing hot oil/water flushes.3 These flushes would have had a twofold effect on the pipeline at an already stress-compromised interval: 1 A field or cold bend is typically done on smaller bore pipelines where terrain may cause the construction contractor to force-bend the pipeline around a corner while lowering the pipe into the trench. 2 A pig is a device used to perform various types of maintenance (e.g., clearing the pipeline of deposition or water) or to inspect the internal surface of a pipeline. 3 Normally a pig launcher is used to send a pig down a line. 2 Investigation Summary Report 2014-022: Pengrowth Energy Corp.; Licence No. P22822-048 Alberta Energy Regulator • The heat resulting from hot flushing operations would have caused the pipe to become more plastic