UPDATE 1-Regulator sets permanent steam restriction at CNRL project

(Adds details of bitumen seepage, CSS process, quote)
By Nia Williams
CALGARY, Alberta, March 21 (Reuters) - The Alberta Energy
Regulator said on Monday it is implementing additional
requirements at Canadian Natural Resources Ltd's CNQ.TO
Primrose oil sands project after concluding excessive steaming
caused a 6,648 barrel bitumen emulsion leak in 2013.
The requirements include permanent limits on the steam
volumes the company is allowed to use to extract bitumen from
underground reservoirs, and a requirement that CNRL seek
approval for each steaming cycle at its Primrose East site.
"The restrictions do amount to a permanent ongoing reduction
in the intensity of the company's operations. The company will
not be able to pursue its original operating strategy at
Primrose," Kirk Bailey, executive vice president of operations
at the AER said.
CNRL has been operating under steam restrictions at Primrose
since the seepage was discovered and in July 2013 company
President Steve Laut said the project was producing about 10,000
barrels per day less than previously expected as a result.
Bitumen emulsion - a mixture of bitumen, sand and water -
was discovered oozing to the surface at two locations at CNRL's
Primrose project in northern Alberta in May 2013. Two more leaks
were discovered over the next month, prompting the AER to impose
restrictions on the site and launch an investigation.
Biutmen seepage to the surface as a result of oil sands
operations are not permitted under Alberta energy regulations. A
number of animals died as a result of the leak, which continued
for months, including birds, mammals and amphibians.
The investigation, described by Bailey as one of the most
complicated ever undertaken by the AER, concluded the seeps were
caused by excessive steam volumes along open conduits such as
well bores, natural fractures and faults and hydraulically
induced fractures.
Cyclic steam simulation involves injecting high-pressure
steam into an oil well to liquefy viscous bitumen so it can flow
to the surface.
The AER said it looked at other producers using the same
technology for oil sands extraction, such as Imperial Oil
IMO.TO , and concluded those projects posed no risk of similar
seepages.