05/24/2011 04:42 EDT | Updated 07/24/2011 05:12 EDT

Rainbow Pipeline Service: Southern Leg May Operate Again Thursday

CALGARY (CP) -- Operations may resume later Tuesday on the southern leg of Plains Midstream Canada's Rainbow pipeline, which has been shuttered as wildfires burn across northern Alberta.

The closure on the line from Nipisi, Alta., to Edmonton has caused oil producers in the region to shut their operations, because their product had nowhere to go once on-site storage tanks filled up.

Cenovus Energy Inc.'s (TSX:CVE) Pelican Lake production has been halted since Thursday. The major oil company normally produces about 22,000 barrels of oil per day there.

Once the Rainbow pipeline comes back into service, it would take Cenovus a day or two to restart its Pelican Lake operations, and another four or five days to get back up to full production, said spokesman Reg Curren.

"You can't bring the plant up too quickly, because it can cause issues. You bring everything back in a slow manner to essentially protect the equipment," he said Tuesday.

Cenovus is taking advantage of the production downtime to complete maintenance work at Pelican Lake, about 90 kilometres northeast of the devastated town of Slave Lake, Alta. The blazes haven't posed any danger to the operations themselves.

Cenovus is not disclosing what kind of financial impact the outage may cause.

The northern section of the Rainbow pipeline has been shut for nearly a month because of a 28,000-barrel spill.

Forest fires were hampering cleanup efforts, but authorities have since lifted an evacuation order, Plains Midstream said in a statement.

It expects to resume full-scale cleanup operations on Wednesday, provided conditions don't change. On Tuesday, a small crew was removing fallen trees and other debris at the spill site.

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