Canadian Natural declares force majeure after fire
CALGARY, Alberta (Reuters) - Canadian Natural Resources Ltd has declared force majeure on January shipments of synthetic crude from its Horizon oil sands plant after a fire last week and is still waiting to assess damage from the blaze, company officials said on Wednesday.
The declaration allows the company to be released from its contractual obligations because of an event outside its control.
The 110,000 barrel per day Horizon plant produces around 10 percent of Canada's synthetic crude. However output was suspended last week after a fire broke out in the plant's coker, a key part of the upgrading facility that converts tarry bitumen stripped from the oil sands into refinery ready synthetic crude.
The lack of supply from Horizon has pushed up the price of synthetic crude, reaching a premium of $1.25 a barrel over the West Texas Intermediate benchmark on Wednesday, trade sources said. Last week it traded at as much as $4 below the benchmark.
Government investigators have placed a stop-work order on the damaged coker, preventing the company from inspecting the site in order to estimate when output can resume, though employees have been allowed into a control room.
Canadian Natural has said that two of four coker drums likely escaped serious damage and the plant may be able to produce up to half its nameplate capacity.
Repairs after fires at other Alberta oil sands upgraders have taken anywhere from a few weeks to several months.
Canadian Natural shares fell 30 Canadian cents to C$42.20 by midafternoon on the Toronto Stock Exchange.
(Reporting by Scott Haggett; editing by Rob Wilson)
© Thomson Reuters 2013 All rights reserved.