October 17, 2008 / 9:28 PM / in 9 years

Canada diesel shortage seen lasting another month

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.

Imperial is starting maintenance on a unit at its 187,000 barrel a day Strathcona refinery at Edmonton. It started rationing diesel supplies in late September, spokesman Jon Harding said.

“We held off doing the required maintenance while Petro-Canada’s turnaround was scheduled to minimize impact on the overall supply and we can’t wait any longer,” Harding said.

That work may be done in late October or early November.

Ervin said he doubts the shortage has meant a big hit yet to the Canadian Prairie region’s economy.

According to his firm’s Web site, retail diesel fuel averages C$1.16 per liter in the Calgary area, down 9 Canadian cents from last week, reflecting the steep slide in world crude oil prices. The fuel sold for C$1.28 a liter in the city at the beginning of September.

“Diesel prices have trended down, although certainly relative to other parts of Canada and relative to the gasoline price, they’re relatively high due to the fact that it’s in short supply right now,” he said.

Reporting by Jeffrey Jones, editing by Richard Valdmanis

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below