Canada diesel shortage seen lasting another month

Fri Oct 17, 2008 5:25pm EDT
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CALGARY, Alberta (Reuters) - A diesel fuel shortage that has left numerous Western Canadian retail outlets without supplies of the key transport fuel could last several more weeks as refineries undergo maintenance, industry officials and analysts said on Friday.

Supplies in Manitoba, Saskatchewan and Alberta have been tight for at least two weeks with three refiners doing planned and unplanned maintenance work at their plants.

"We're probably four or more weeks away before we see a return to more stable supply," said Michael Ervin, head Calgary-based refining and marketing consultants MJ Ervin & Associates.

Diesel-producing units at Alberta plants run by Petro-Canada, Imperial Oil Ltd and Suncor Energy Inc have all been undergoing maintenance.

Suncor said it is in the process of restarting a unit at its 260,000 barrel per day northern Alberta oil sands plant, which supplies diesel into the wholesale market, after an unplanned outage.

Suncor would not say how much diesel the plant is able to produce.

Petro-Canada's 135,000 bpd Edmonton refinery has been in a major turnaround since this summer to tie in new equipment as part of a C$2.4 billion ($2 billion) refit. It is expected to start up around the end of this month.

The company has implemented three initiatives to cushion the impact of tight diesel supplies, Petro-Canada spokeswoman Sneh Seetal said.

They include importing the fuel from outside the area, making sure the largest retail sites are given priority on supplies and managing how much diesel it delivers to the sites, Seetal said.   Continued...