Canadian upgrader maintenance to cut second quarter synthetic crude supply
By Nia Williams
CALGARY, Alberta (Reuters) - More than 10 percent of Canada's synthetic crude supply is set to go offline during the second quarter of 2015 as oil sands producers in northern Alberta carry out planned maintenance at four major facilities that upgrade tar-like bitumen into crude.
Royal Dutch Shell (RDSa.L: Quote), Suncor Energy Inc (SU.TO: Quote) and Canadian Oil Sands Ltd COS.TO, which is the largest interest owner in the Syncrude Canada project, all confirmed this week they have scheduled maintenance for this spring.
Maintenance on the upgraders, which convert mined bitumen from the oil sands into refinery-ready synthetic crude, is likely to support prices over the next couple of months.
Light synthetic oil-sands crude for April delivery has been trading at a premium to West Texas Intermediate crude throughout March in anticipation of curtailed supply.
Synthetic crude was last bid at $1.50 per barrel above WTI, according to Shorcan Energy brokers.
Canadian Oil Sands said Syncrude's Coker 8-3 would undergo a turnaround in the second quarter. It is one of three 100,000 barrel per day cokers at the project, meaning Syncrude output will be cut by about a third.
COS spokesman Scott Arnold said the company did not typically comment on planned turnarounds, but on average they take 40 to 50 days and reduce production by four to five million barrels.
"The total supply of synthetic (from the oil sands) is 800,000 or 900,000 bpd, so it is taking 10 plus percent off the market," said FirstEnergy Capital analyst Mike Dunn. Continued...