(Adds Suncor update)
By Nia Williams and Catherine Ngai
CALGARY, Alberta/NEW YORK April 19 The Syncrude
Canada oil sands project will run at reduced rates in May and
June while maintenance work that was brought forward after a
fire at the plant last month is completed, majority-owner Suncor
Energy said on Wednesday.
Two trading sources in Calgary said Syncrude also issued an
update to customers reiterating its most recent forecast that it
will produce 5.3 million barrels in May and 6.6 million barrels
The plant in northern Alberta has capacity to produce
350,000 barrels per day, nearly 11 million barrels per month,
but cut production in April to zero after a fire in March that
damaged the facility and forced Syncrude to advance planned
Suncor said in a statement pipeline shipments would restart
at approximately 50 percent of capacity in early May and
production is expected to return to full rates by the end of
"Syncrude has developed a detailed repair schedule and
return to service plan that includes the completion of a planned
turnaround which Syncrude advanced in order to minimize the
impact of the outage," Suncor said.
Investigations show damage from the mid-March fire was
mostly isolated to a piperack adjacent to a hydrotreater, the
company added. Suncor does not expect the Syncrude outage to
affect its overall 2017 production guidance as output elsewhere
should offset the cuts.
Traders said production rates for May and June were expected
to be lower even before the fire because of the scheduled
turnaround, but the outages still sent synthetic crude prices
surging higher in early April.
Light synthetic crude from the oil sands for June delivery
last traded at $2.00 per barrel over the West Texas Intermediate
benchmark, according to Shorcan Energy brokers, weakening from
Tuesday's settle of $2.35 per barrel over WTI as market players
looked ahead to production ramping up.
There were no trades in synthetic barrels for May delivery,
which settled at $2.50 per barrel over WTI the previous day.
Volumes were thin as the Canadian crude market is outside a
2-1/2-week-long trading window, which lasts from the first of
the month until the day before pipeline nominations are due, in
which the bulk of transactions take place.
Western Canada Select heavy blend crude for June delivery
last traded at $10.70 per barrel below WTI, having settled at
$10.80 per barrel under the benchmark on Tuesday.
(Reporting by Nia Williams and Catherine Ngai; Editing by Bill
Trott and Tom Brown)