$630-Million Suit Names Engineering Firms

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CALGARY -- Suncor Energy Inc. is suing engineering firms Bantrel Co., Bechtel Group Inc. and others for $630-million, over a fire at its oil sands operations that knocked out about 115,000 barrels of production for eight months, as the price of oil surged past $50 (U.S.) a barrel.

The lawsuit is believed to be the biggest in the history of the oil sands and is unusually large in the engineering business.

Suncor is suing on behalf of its insurers, from whom the Calgary company collected $979-million (Canadian) in business interruption payments for the Jan. 4, 2005, fire that shut down one of the firm's two upgraders north of Fort McMurray. Bantrel and Bechtel are the main engineering companies behind Suncor's Millennium expansion where the fire occurred.

The cause of the fire was the failure of what's called Nozzle N19, Suncor alleged in a statement of claim filed with the Court of Queen's Bench in Calgary dated Dec. 28, 2006. The nozzle was one of two connected to a fractionator, a tower that holds a mixture of bitumen and heavy oil and gas at about 380 C and separates the various oils.

In the lawsuit, Suncor alleges that Nozzle N19 was built with carbon steel and was supposed to have been clad and lined with stainless steel but wasn't, leading to severe corrosion, erosion and thinning of the nozzle, which then failed and sparked the fire. Received on Mon Jan 08 11:19:00 2007