Failure to conduct maintenance inspections cause of Deep Panuke fire: report

An artist rendering of the Deep Panuke production platform, located 250 km southeast of Halifax on the Scotian Shelf.

HALIFAX -- The failure to conduct annual maintenance inspections aboard the Deep Panuke offshore natural gas project was the underlying reason behind an electrical fire that broke out earlier this year, an interim report says.

The report, obtained under federal access-to-information law, says the project was supposed to undergo yearly tests to detect heat coming off electrical equipment and connections. But SBM Offshore, the Dutch-based owner of the offshore platform, did not carry out those tests prior to the Jan. 19 fire, the report says.

"The existing maintenance program ... includes annual thermography testing as well as low resistance (ductor) testing and other checks such as visuals every five years," says the report, dated six days after the fire.

"At the time of the event, none of the annual inspections were conducted (root cause)."

The report, one of three obtained by The Canadian Press that flags electrical problems aboard Deep Panuke, also says inspectors found high-resistance connections and "several instances of loose control wiring" in the equipment after the fire. It says high-resistance connections can cause "significant temperature increases which can lead to equipment damage and fires."

The report was submitted by Encana (TSX:ECA), the project operator, in collaboration with SBM Offshore. It was approved by the Canada-Nova Scotia Offshore Petroleum Board, which regulates the province's offshore energy industry.

The Canadian Press requested a copy of the final report into the fire under access-to-information law but the board has not yet released it.

Firefighters quickly extinguished the blaze when it broke out aboard the platform, which is located about 250 kilometres southeast of Halifax. There were no injuries.

Anne Guerin-Moens, a spokeswoman for SBM, declined an interview request. But in an email she said the fire was reported to and examined in detail by the board.

"Appropriate actions are taken to address root causes under the robust Canadian regulations," she said, adding that Deep Panuke has been certified by Lloyd's Register as fit to operate.

Lori MacLean, a spokeswoman for Encana, also declined an interview request but said the company monitors safety aboard Deep Panuke and stresses the importance of inspections.

"Encana has worked closely with the contractors involved to drive home the importance of prevention first," MacLean said in an email. "Emphasis also has been placed on increased vigilance by contractors with respect to inspections, maintenance and training."

Neither Guerin-Moens nor MacLean said why the annual inspections weren't conducted.

Other reports obtained under access to information say there were underlying quality assurance problems and in some instances installation problems with electrical equipment aboard Deep Panuke prior to the fire.

On March 19, 2012, an electrician who was inspecting a high-voltage switchboard reported a variety of flaws, one of the reports said.

"Deficiences were noticed ranging from loose and missing earthing bolts, loose bolts, nuts and washers in cabinets, a failed earthing switch leaver pivot pin and dust accumulation in cabinets," said the final incident report dated Nov. 30, 2012.

That led to an investigation of other switchboards on board the platform, which found problems including incorrectly tightened bolts and "general debris lying in panels," the report said. It added that there were no formal re-inspections of the platform after it was brought from a shipyard in Abu Dhabi, United Arab Emirates, where most of it was built.

The report said Encana decided against inspections of some of the lower voltage units and emergency switchboards because its staff didn't notice problems and a "full inspection would mean blacking out the rig."

MacLean said Encana ruled out the possibility that the decision against such inspections had anything to do with the fire.

"Encana had similar questions at the time of the events, but investigation and follow-up showed that linkages were not possible," she said in an email.

Another report was filed on Aug. 16, 2012, about an incident where an electrical breaker failed, "blowing the breaker inspection door open." Two workers were nearby at the time but weren't injured, the report says.

The report said the root causes included defective equipment and "an issue of workmanship and poor factory inspection."

SBM declined comment on both reports.

Keith Landra, the chief safety officer at the Canada-Nova Scotia Offshore Petroleum Board, said it has followed up to ensure the operator has installed equipment safely and performed the maintenance recommended in the reports.

"It was determined the work collectively done by the operator, the contractor and Lloyd's Register as certifying authority was appropriate and the right conclusions were arrived at and the right corrective actions were implemented," he said.

Landra said the board agreed with the decision not to inspect all of the lower voltage units and emergency switchboards and it also doesn't see a link with the fire.

Deep Panuke has been plagued by delays since receiving regulatory approval in 2007. It was initially supposed to go into production by late 2010.

In August, the board granted Encana authorization to begin shipping gas to market, but the development has yet to produce a steady flow of gas.