UPDATE 2-Canada to impose speed limits on trains carrying dangerous goods after crash

after crash@ (Releads with Canada imposing limits on trains; adds quotes from transport minister)

OTTAWA, Feb 6 (Reuters) - Canada said on Thursday it would impose temporary speed limits on trains hauling dangerous goods after a Canadian Pacific Railway Ltd freight train derailed and caught fire.

The accident, which happened in the early hours of Thursday near Guernsey, Saskatchewan, sparked a major fire. It was the second derailment in the area in a span of two months.

Federal Transport Minister Marc Garneau said that effective at midnight Friday (0500 GMT), trains hauling more than 20 cars of dangerous goods would be limited to 25 mph across the country for the next 30 days.

The limit in urban areas will be 20 mph, he told reporters. Depending on results of the probe into Thursday's derailment, the 30-day period could be shortened or lengthened. The reductions represent a halving from the normal speed limits.

"I realize there will be an effect on the economy of the country ... but it is very very important that we do not sacrifice safety," Garneau said.

A company spokesperson said CP was making "initial assessments of the incident" and did not have more details.

Media reports said http://bit.ly/3bjLi0z the train was possibly hauling oil, as the derailment, which took place more than 100 kilometers southeast of Saskatoon, had caused a massive fire.

"Emergency responders have been deployed to the site," CP company said in an email to Reuters.

In July 2013, 47 Canadians died in the Quebec town of Lac-Megantic after a train with oil tankers derailed and exploded. (Reporting by David Ljunggren in Ottawa; Additonal reporting by Ankit Ajmera in Bengaluru; Editing by Leslie Adler)