CALGARY, Alberta (Reuters) - Suncor Energy Inc (SU.TO), the largest producer from Canada's oil sands, said on Friday that it has extended the time period between major maintenance shutdowns at its northern Alberta project site to every five years from its prior four-year standard.
Steve Douglas, Suncor's vice-president of investor relations said both of the company's upgraders, which convert tar-like bitumen from the oil sands into refinery-ready synthetic crude, will be on the new five-year schedule once the company completes its current maintenance turnaround on the 125,000 barrel-per-day U1 upgrader. The shutdown, which began April 18, is expected to wrap up next week.
"Upgrader number two went through a major maintenance turnaround in 2011 and the next time it's scheduled is 2016, so it's in its first five year stretch and U1 is now going into its first five-stretch," Douglas said.
Maintenance shutdowns can cost hundreds of millions of dollars for replacement equipment, labor and lost revenue. Indeed, with the shutdown of its U1 upgrader, the output from Suncor's oil sands operations in May fell to 218,000 barrels per day, down from 375,000 bpd in March.
"If you're doing four (turnarounds) in 20 years versus four in 16 years, clearly there is a significant benefit," Douglas said. "The other piece, of course, is you're entirely down during a maintenance period ... There's significant foregone revenue during a period like that. It's material."
Douglas said Suncor is able to extend the stretch between turnarounds by increasing preventative maintenance during normal operations.
(This story is refiled to correct attribution in final paragraph to "Douglas said" from "Williams said".)
Reporting by Scott Haggett; Editing by Marguerita Choy and Carol Bishopric