Husky Energy says 900,000 litres of produced water spilled from one of its pipelines in northwestern Alberta.
Produced water is a byproduct of oil and gas extraction and sometimes contains residual petroleum and chemicals.
The Calgary company says the leak was discovered on Monday in the Rainbow Lake area and some of the water spilled into nearby muskeg. Rainbow Lake is a town located about 135 kilometres west of High Level.
Spokesperson Dawn Delaney says the spill is contained and the company is continuing to clean it up with pumps and vacuum trucks.
She said there has been no observed harm to wildlife and fencing has been put up to keep animals away.
A spill of 500,000 litres was initially reported to the Alberta Energy Regulator, but Delaney said the amount was increased after an initial investigation.
The energy regulator said environmental contractors are at the site.