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Suncor Restarts Heavy Canadian Oil Shipment From Syncrude Oil Sands

Pipeline

Suncor Energy said on Monday that pipeline shipments from the Syncrude Mildred Lake Oil Sands facility in Canada had resumed after completing repairs following a fire at the upgrader on March 14.

Over this past weekend, Syncrude completed the necessary repairs and start-up activities, and shipments had begun, Suncor said. Currently, pipeline shipments are at around 140,000 bpd (gross), and are expected to increase as additional units complete turnaround activities. Production at the facility is expected to return to full rates in June, Suncor said.

On March 27, two weeks after the March 14 incident, Suncor said that Syncrude had advanced the planned eight-week turnaround originally scheduled to begin in April, in order to mitigate the impact of the unplanned outage. In the last update to the market before the announcement of the restart of the pipeline, Suncor said on April 19 that it had launched an accelerated repair schedule to restart pipeline shipments at some 50 percent capacity in early May.

The suspension of operations at Syncrude’s upgrader in Alberta lifted Canadian oil prices substantially in early April, also strengthening U.S. blends that make up WTI, as the bulk of Canadian synthetic crude and heavy oil sands crude is exported to its southern neighbor. As a result, prices of Canadian heavy crude jumped to the highest in two years, while the price of synthetic crude, which is what the Syncrude facility produces and a lot of oil sands producers use, rose to a four-year high.

As this supply disruption of Canada’s heavy crude oil supply to the U.S. was coinciding with reduced shipment to the U.S. from OPEC, analysts had expected that Gulf Coast refineries would buy in April as much Mexican crude as they can, because higher Canadian crude prices made the similar Mexican grade cheaper and therefore more attractive.

By Tsvetana Paraskova for Oilprice.com

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