05/09/2016 09:13 EDT | Updated 05/10/2017 01:12 EDT

Statoil's Leismer thermal oilsands project closes as fire stops pipeline

CALGARY — The wildfire that burned through Fort McMurray, Alta., and continues to rage in the region has forced the shutdown of another oilsands project.

On Monday morning, the Canadian subsidiary of Norwegian giant Statoil ASA confirmed that it has closed its Leismer demonstration project.

Spokeswoman Kyra Grue said the facility had been producing about 20,000 barrels of bitumen a day before the fire began a week ago, but more recently had been operating at a reduced rate as non-essential staff were sent home.

The decision to shut it completely was made because of the precautionary closure of an Enbridge pipeline that supplies light oil to dilute the bitumen and allow it to flow in a pipeline to market.

Analysts estimate about one million barrels a day of raw and upgraded bitumen is offline because of the wildfires. That's about one-quarter of Canada's overall crude oil production.

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