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Canadian oilfield workers readying return after wildfire

(Adds more details on more oil activity restarting, relief payments and developments throughout)

By Nia Williams and Ernest Scheyder

CALGARY/LAC LA BICHE, Alberta, May 11 (Reuters) - Workers for one of the largest oil sands companies affected by a massive wildfire in northern Canada will begin returning to the shuttered facilities on Thursday, a union official said on Wednesday, the latest indication that the key petroleum production area was slowly coming back online.

Meanwhile, the premier of the province of Alberta and the head of the Canadian Red Cross announced that residents of Fort McMurray, the oil-boom town that was evacuated last week because of the fire, would be offered direct financial aid.

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In Ottawa, Prime Minister Justin Trudeau established a new ad hoc cabinet committee to coordinate federal relief efforts. Trudeau will tour the fire zone on Friday.

Ken Smith, President of Unifor Local 707, a union that represents 3,400 Suncor Energy Inc (Toronto: SU.TO - news) workers, said the company was starting to fly employees back to its oil sands base plant from Thursday.

"It (Other OTC: ITGL - news) will take a few days to get the plant up and in condition to start handling feed. The mine can get going as soon as the trucks and shovels are ready, but it will take the plant a bit longer to become functional," Smith said.

"There are a lot of different units that run to make everything happen up there, it's a very complex work site."

Smith said they would be flown to Suncor's Firebag site, about 120 km (72 miles) north of Fort McMurray, and transported by bus to the base plant.

Facilities north of Fort McMurray that had been shuttered largely because of heavy smoke rather than fire were likely to come back on line first, in a matter of days in many cases.

Roughly 1 million bpd of output was shut down during the fire, about half of the oil sands' usual daily production.

Late Wednesday, Enbridge Inc (Toronto: ENB.TO - news) said it had restarted its 550,000 barrel per day Line 18 pipeline after it was shut as a precaution. The line carries crude from Enbridge's Cheecham terminal 380 kilometers (236 miles) south to the regional crude trading hub of Edmonton. Enbridge also said crews were on site at its facilities in the Fort McMurray region and confirmed its terminals were not damaged by the wildfire.

Royal Dutch Shell Plc (Xetra: A0ET6Q - news) was the first company to resume operations in the area, restarting its Albian Sands mines at a reduced rate. The facility can produce up to 255,000 bpd.

Syncrude, controlled by Suncor, restarted power generation at its oil sands mine in Aurora, north of the city, on Tuesday as it began planning to resume operations. The site has a total capacity of around 315,000 bpd.

Some supplies and materials began heading north along the main highway into the area, which reopened for specially permitted industrial and commercial vehicles only late Tuesday.

Still, some projects to the south and east of Fort McMurray remained unreachable as the fire threat persists in that vicinity. Only firefighters were permitted to pass through a police checkpoint along the main road in that area, according to a Reuters witness, and smoke from still-burning fires was visible on the horizon.

The size of the fire was little changed on Wednesday at roughly 229,000 hectares (566,000 acres) and moving away from the community.

RELIEF FOR EVACUEES

Alberta Premier Rachel Notley said the province was making cash available immediately to the 90,000 evacuees from the fire zone. The funds, C$1,250 per adult and $500 per child, would be distributed by debit cards beginning immediately to evacuees in Edmonton, Calgary and Lac La Biche.

"This (funding) represents our collective commitment to help them through this crisis so their lives can return to normal as soon as possible," Notley said at a press conference in Edmonton.

Canadian Red Cross Chief Executive Conrad Sauve said his agency was making C$50 million in funds available to the relief effort now, out of C$67 million that had been raised so far. That will be distributed as electronic funds transfers of $600 for each adult and $300 for each child, he said.

"This is the most important cash transfer we have done in our history and the fastest one," Sauve said at the press conference.

With (Other OTC: WWTH - news) no timeline yet for when the town of Fort McMurray can be re-inhabited, the local government council had to hold its first meeting since the evacuations in Edmonton on Thursday. The mood was somber and defiant.

"I have every faith and confidence that we will have a community and the future state needs to be as good as it was before, only better, and it needs to be resilient," said Melissa Blake, mayor of the Regional Municipality of Wood Buffalo, which encompasses Fort McMurray.

(Additional reporting by David Ljunggren in Ottawa, Liz Hampton in Calgary and Allison Martell in Toronto; Writing by Dan Burns in Toronto; Editing by Alan Crosby)