Canadian Oil Sands project to operate at ‘minimal’ rates until end of the month
Canadian Oil Sands (TSX:COS), the main owner of the giant Syncrude oil sands project in Alberta, said the venture won’t return to normal operations until at least the end of the month.
The project, the largest synthetic crude oil processing facility in Canada, was affected by a fire over the weekend. The incident, still under investigation, forced the company to halt production at the 326,000 barrel-per-day mining and upgrading project.
Canadian Oil Sands said the project will operate with “minimal synthetic crude oil shipments and operating rates” for the next two weeks as part of a phased recovery.
“Affected units are planned to be subsequently restored to operation, with a return to more normal production rates anticipated towards the end of September,” it said.
The disruption means that Syncrude output this year will be “near the low end” of the current 96 million to 107 million barrel range for the year, the company said in the statement.
COS confirmed the fire had destroyed “pipes, power and communication lines on a pipe rack between a hydrotreating unit and its associated amine unit.” However, it also said the incident did not cause damage to mining and extraction operations or other major upgrading units.
The company holds a 37% stake in Syncrude Canada and six other firms own the rest of the project, including Suncor Energy Inc, Imperial Oil Ltd, Nippon Oil subsidiary Mocal Energy Ltd, Murphy Oil Corp, China’s Sinopec, and CNOOC subsidiary Nexen.
The news follows this week’s announcement by Nexen, the Canadian subsidiary of Chinese state-owned CNOOC, which said it would down its Long Lake oil sands operations south of Fort McMurray in response to an emergency regulatory order. The Alberta Energy Regulator (AER) gave the order Tuesday, as part of an ongoing investigation into a large spill discovered in July.
Both unrelated incidents have increased prices for Canadian synthetic crude in recent trading.
The country’s total oil sands production is close to 2 million barrels a day, much of which is exported to the U.S.—the largest consumer of Canadian crude.