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By Nia Williams
CALGARY, Alberta, May 19 (Reuters) - The sudden surge northof the massive wildfire burning in Canada's oil sands region hasdealt a new setback to producers, triggering a second round ofevacuations and threatening work camps north of Fort McMurray.
With the the city of Fort McMurray off limits and fewerplaces to house workers needed to restart operations, productionmay be shut down for longer than companies and market analystshad anticipated.
A shift in winds and hot temperatures sent the blaze roaringtoward Suncor Energy and Syncrude Canada's mining andupgrading projects late Monday, forcing them to shut down forthe second time in two weeks.
It also prompted the hasty evacuation of 8,000 oil sandsworkers from a dozen nearby camps, engulfed one 665-room lodgein flames and threatened other camps, emergency officials said.
Scores of work camps scattered across the remote regionhouse thousands of people who fly in from around the country.
"We have got our fingers crossed because without the campsthere's nowhere for any workers to go," said Ian Robb, presidentof the Unite Here Local 47 union, which represents camp cooksand cleaners.
"If the camps are not standing, there's no rebuilding."
Suncor's base plant and Syncrude alone account for about665,000 barrels per day of oil sands crude production, and bothwere in the process of bringing back workers and restartingoperations after the first round of shutdowns.
Analysts said a return to normal operations likely wouldtake at least two weeks after it is deemed safe for staff toreturn to sites. And all that depends on the stillout-of-control fire.
"We were hearing like everyone else that companies weregetting staff back on location and warming things up, and nowit's evacuation again. We don't know how long this will last,"said Rob Bedin, engineering analyst at RS Energy Group inCalgary.
A dozen oil sands producers shuttered output as a precautiontwo weeks ago as the fire forced Fort McMurray's 90,000residents to flee and destroyed nearly 15 percent of the city'sstructures.
The loss of 1 million barrels per day output from the oilsands, the world's third largest crude reserves, accounts forroughly a quarter of Canada's total production.
"We're probably talking until the start of June to look atsome bigger scale restarts at these projects," said FirstEnergyCapital analyst Martin King. "It's basically a month ofoutages."
Spokeswoman Sneh Seetal said it was too soon to say whenSuncor would be able to return to normal.
Last week, oil industry executives confidently predictedsome facilities would restart operations "within days." But, sofar, only Shell Canada's Albian Sands project and Statoil ASA's Leismer facility have managed toreturn, at reduced rates.
Several firms had plans to begin air commutes for workers,relying on the fly-in-fly-out (FIFO) system common in the areato get workers to remote sites.
At that time, the main fire risk was seen to the south ofFort McMurray, which has smaller thermal projects. Thewildfire's rapid charge north toward the largest projects in theregion has changed the picture.
Air quality concerns also are holding up repair efforts. TheAlberta government said on Wednesday it plans to start phasedre-entry to Fort McMurray on June 1, as long as safetyconditions are met.
Ongoing disruption to critical energy infrastructure also islikely to slow the return to normal.
The 355,000 hectare blaze got within 1 kilometre of EnbridgeInc's Cheecham terminal on Monday and prompted InterPipeline to partially shut down a key diluent pipelineto the oil sands on Tuesday, the second time since the firebegan on May 1. The pipeline returned to full operations, again,on Wednesday. (Reporting by Nia Williams; Editing by Lisa Girion)
