Syncrude Brings Forward Maintenance at Oil Sands Plant after Fire

Reuters, March 28, 2017

Syncrude Canada has brought forward an eight-week turnaround at its oil sands plant in northern Alberta after a fire two weeks ago damaged the facility and forced a cut in crude production, majority-owner Suncor Energy said on Monday. Shipments of synthetic crude are expected to restart at up to 50 percent of the 350,000 barrel-per-day plant's capacity in mid-April and gradually ramp up to full rates once the maintenance is finished, the company said in a statement.

Many industry players in Calgary were anticipating the turnaround would be brought forward as a result of the fire and there was no immediate impact on prices in the synthetic crude market, where prices soared earlier in the month when news of the outage first reached traders. Light synthetic crude from the oil sands for April delivery settled at $4.50 per barrel over the West Texas Intermediate benchmark on Friday, according to Shorcan Energy brokers, and there were no early morning trades on Monday.

The fire at the Mildred Lake upgrader, which processes mined bitumen into refinery-ready synthetic crude, broke out on March 14 after a line failure caused a leak near one of the naphtha hydrotreating units. One worker was hospitalized and the fire burned under control for two days before being extinguished. Imperial Oil, which provides operational support to Syncrude and is a 25-percent owner in the joint venture, said in a separate statement there are currently no shipments of synthetic crude from the plant.

"Efforts remain focused on safely assessing the extent of the damage and developing a recovery plan for a return to normal operations," Imperial said.

Suncor said damage was largely isolated to a piperack adjacent to the hydrotreater, containing piping, cables, and electrical circuits. The company, which runs its own oil sands mining and upgrading plant around 20 kilometers (12 miles) away, said it will start handling some volumes of untreated Syncrude production to help manage inventories. Suncor also said it does not expect the Syncrude outage will affect its overall 2017 production guidance.

(Reporting by Nia Williams; Editing by Marguerita Choy)

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