Syncrude shutdown cuts ConocoPhillips oil sands production

Syncrude shutdown
This month’s Syncrude shutdown is the result of a fire at the Alberta oilsands plant in March. Pete Potipcoe Facebook photo.

Syncrude shutdown forced by March plant fire

A fire at the Syncrude oilsands facility last month that caused significant damage to the plant, has resulted in a complete production cut at the 350,000 b/d northern Alberta operation for the month of April.

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The temporary Syncrude shutdown has also curtailed output from the ConocoPhillips’ Surmont plant.  The 140,000 b/d plant uses light synthetic crude from Syncrude to dilute tarry bitumen into heavy blend that can be transported through pipelines.

“(The) Syncrude outage has had an impact on our output, but we are working with suppliers to understand the timeline as the Syncrude owners work towards a full recovery,” ConocoPhillips Canada spokeswoman Michelle McCullagh said in an email to Reuters.

McCullagh did not specify the crude volume reduction, but combined with the Syncrude shutdown, up to 490,000 b/d or nearly one-fifth of the Alberta oilsands 2.5 million b/d production may be offline.

According to a report by Reuters, the shutdown and shortage have helped push Canadian crude prices to the narrowest discount in nearly two years.

Also adding to the heavy crude shortage is planned maintenance underway at Suncor Energy’s 180,000 b/d Firebag thermal plant.

As a result of the shortages, prices for heavy and synthetic Canadian crude have jumped recently.  Western Canada Select heavy blend crude for May delivery last traded at $10.15/barrel below WTI, according to Shorcan Energy Brokers.  This is the smallest discount since June, 2015.

Light synthetic crude from the oilsands for May delivery settled at $4.84 over the WTI benchmark on Monday.