UPDATE 1-Suncor says returning to full output after fire

CALGARY, Alberta, Oct 3 (Reuters) - Suncor Energy Inc (SU.TO) said on Wednesday it expects to return to full output at its Alberta oil sands project by the weekend after a fire on Tuesday cut production by 85,000 barrels a day.

Suncor spokeswoman Patti Lewis said a preliminary investigation showed damage to one of its two oil sands upgraders from the small fire was minimal and the company was now ramping up production from the facility.

"We expect to be at normal rates over the weekend," she said. "We are taking it slow just to be cautious and ensure start up occurs in a safe manner. The investigation into the cause is continuing."

The fire early on Tuesday morning cut output at the project site near Fort McMurray, Alberta, to about 175,000 barrels a day, down from 260,000 bpd before the blaze.

Upgraders are used to convert tar-like bitumen stripped from the oil sands into refinery-ready crude.

It was the second problem in as many days for a major oil sands producer. Syncrude Canada Ltd, the biggest project in the region, was forced cut production by 70,000 barrels a day on Monday after a coker unit malfunctioned.