September 17, 2015 / 2:29 PM / 4 years ago

UPDATE 1-Nexen Energy says Long Lake oil project resumes full output

(Adds details of Long Lake production)

CALGARY, Alberta, Sept 17 (Reuters) - Nexen Energy, a wholly owned subsidiary of China’s CNOOC Ltd, said on Thursday it has resumed full production at its Long Lake oil sands and upgrader facility in northern Alberta after regulators amended a pipeline suspension order.

The Alberta Energy Regulator last month ordered Nexen to shut in 95 pipelines at the Long Lake facility as part of an investigation into one of the largest oil-related pipeline spills on North American soil, discovered in July.

Nexen said the AER lifted the suspension order on 10 pipelines on Wednesday. That move was in addition to a Sept. 6 amendment to the suspension that allowed the company to restart 40 pipelines and maintain about 75 percent of production.

The two orders together mean the Long Lake facility can return to full production. It was producing around 50,000 barrels per day of synthetic crude before the July spill.

A further 45 pipelines, which Nexen said are not currently required for operations, remain closed.

“These pipelines, most of which involve production of oil sands, will not return to service until Nexen can demonstrate that the pipelines can be operated safely and within all requirements,” the AER said in a statement on Wednesday.

The investigation into the Nexen Long Lake pipeline failure is ongoing.

Light synthetic crude from the oil sands for October delivery weakened in early trading on Thursday. It last traded at a discount of 65 cents per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers, widening from a discount of 35 cents per barrel below WTI on Wednesday. (Reporting by Nia Williams; Editing by Chizu Nomiyama and Paul Simao)

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