(Adds overall Canadian crude production, details on Firebag maintenance, updates heavy price)
By Nia Williams
CALGARY, Alberta, April 4 (Reuters) - A shutdown at the Syncrude oil sands facility in northern Alberta has curbed output from ConocoPhillips’ Surmont plant, the U.S. company said on Tuesday, as the shortage helped push heavy Canadian crude prices to the narrowest discount in nearly two years.
The 350,000 barrel-per-day Syncrude project cut production for all of April to zero, according to market sources, following a fire last month that damaged the facility and forced the operator to bring forward planned maintenance.
ConocoPhillips has had to reduce production at its 140,000 bpd Surmont thermal plant because it uses light synthetic crude from Syncrude, one of the largest producers in Canada’s oil sands, to dilute tarry bitumen into a heavy blend that can flow through pipelines.
“(The) Syncrude outage has had an impact on our output, but we are working with suppliers to understand the timeline as the Syncrude owners work towards a full recovery,” ConocoPhillips Canada spokeswoman Michelle McCullagh said in an email.
She did not specify the reduction in crude volume, but combined with the Syncrude outage, up to 490,000 bpd, or nearly one fifth, of the oil sands’ 2.5 million bpd of supply is potentially off the market.
On top of that Suncor Energy’s 180,000 bpd Firebag thermal plant is also undergoing planned maintenance this quarter, adding to the shortage of heavy crude.
Canada produces around 4 million bpd and exports about 3.1 million bpd, almost entirely to the United States.
Prices for heavy and synthetic Canadian crude have surged on tight supply and extended gains on Tuesday.
Western Canada Select heavy blend crude for May delivery last traded at $10.15 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy Brokers, the smallest discount since June 2015.
Light synthetic crude from the oil sands for May delivery last traded at $5.30 per barrel over WTI, having settled at $4.85 per barrel over the benchmark on Monday.
Syncrude is a joint venture majority-owned by Suncor Energy Inc, while Imperial Oil Ltd provides operational, technical and business management support. (Reporting by Nia Williams; Editing by Bill Rigby and Richard Chang)