Estimated loss from Canadian oil spill reduced

Husky Energy has notified the general liability market of a C$180m (US$134m) loss from a Canadian oil spill into the Saskatchewan River in July, reports The Insurance Insider.

QBE was the lead insurer on the general liability placement. At the time there were fears that the loss could be up to C$500m, but speedy repair work and damage mitigation appears to have cut the cost. Saskatchewan has proposed tougher rules for pipelines, with requirements for financial assurance from operators for pipelines in high-risk locations, such as water crossings.

Husky Energy said that shifting ground caused a pipeline to burst resulting in about 225,000 litres of heavy crude oil and diluent leaking into the North Saskatchewan River, and that this was a sudden, one-time event. Husky spent about C$90m responding to the spill, with shoreline clean-up efforts completed in October after recovering about 210,000 litres of the spillage.

The spill forced the cities of North Battleford, Prince Albert and Melfort to shut off their intakes from the river and find other water sources for almost two months.