Production at Syncrude’s Mildred Lake oil sands to fully resume in June

Suncor Energy (TSX, NYSE:SU), Canada’s largest oil and gas company, expects its Syncrude Mildred Lake oil sands upgrader to return to full operation by the end of June, as a result of an explosion and fire that shut down the operation last month.

In an update about the issue, the Calgary-based firm — the majority stakeholder in Syncrude — said the Mildred Lake oil sands upgrader is currently operating at a reduced rate, but that it does not expect that to have an impact in Suncor's oil output target for the year.

Pipeline shipments would restart at approximately 50% of capacity in early May and production is expected to return to full rates by the end of June.

The company had originally said it expected the upgrader to resume normal operations this month.

"The investigation and inspection show that damage was largely isolated to a piperack adjacent to the hydrotreater," Suncor said in the statement.

"An accelerated repair schedule has been developed to achieve restart of pipeline shipments at approximately 50 per cent capacity in early May and production is expected to return to full rates by the end of June."

Such plan will include moving up the dates for planned seasonal maintenance to minimize the effect of the outage on production.

A previous fire at the Mildred Lake site in August 2015 reduced output from the facility by about 80%. The flames damaged pipes, power and communications lines between two units of the upgrader, which did not return to normal production until October.

Syncrude, a partnership among six companies, employs about 4,600 people in Alberta. Its Mildred Lake facility is located about 40 km north of Fort McMurray.