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

Suncor Energy (TSX, NYSE:SU), Canada’s largest oil and gas company, said Monday it expects to meet its 2017 production targets despite an explosion and fire that shut down Syncrude's Mildred Lake oil sands upgrader almost two weeks ago.

Suncor Energy, the largest partner in Syncrude, expects to meet its 2017 production targets despite the fire that shut down Syncrude's Mildred Lake oil sands upgrader almost two weeks ago.

The Calgary-based firm, the largest partner in Syncrude, said the March 14 incident was caused by the loss of containment on a line near one of the naphtha hydrotreating units.

The explosion and subsequent fire, left one worker severely injured and forced the shut down of the Mildred Lake oil sands upgrader, which has not shipped any synthetic crude from the operation since then, noted Imperial Oil (TSX:IMO), which owns 25% and is the de facto operator of the project.

“Efforts remain focused on safely assessing the extent of the damage and developing a recovery plan for a return to normal operations,” Imperial said, adding that production is expected to ramp up in stages as damage is repaired and units are ready for restart.

Pipeline shipments of treated product are expected to resume at up to 50% capacity in April, gradually ramping up to full rates after the turnaround is completed, according to Suncor, which has a 53.74% stake in Syncrude, Canada’s largest synthetic oil project.

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. It returned to normal production the following 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.