Oil supplies may stay tight following Syncrude outage
CALGARY Canadian crude supplies may remain tight in the coming weeks as Suncor Energy Inc. works to bring its massive Syncrude oilsands operation back online, a process that the company said won’t be completed until September.
Pipeline shipments from the facility, which went down last month after a transformer trip cut power to the plant, will be about 60 per cent to 70 per cent of capacity for August, Calgary-based Suncor said Monday. To help mitigate the impact of the shutdown, the company is accelerating some maintenance on it that was scheduled for late this year and early next year.
The outage at Syncrude, which can produce as much as 350,000 barrels of synthetic light crude oil a day, is reducing North American supplies at a time when Venezuela’s collapse, tensions in Libya and a U.S. call for allies to stop buying from Iran already are pushing up prices. Crude oil prices in New York surged in the days after the Syncrude outage was announced.
“It highlights the frailty of the whole system,” said Tim Pickering, founder and chief investment officer at Calgary-based Auspice Capital Advisors. “These aren’t easy turn-them-on, turn-the-moff operations.”
Oil prices in New York were little changed on Monday, partly because some of Syncrude’s production will be returning in the coming weeks. One of the facility ’s coking units, producing about 150,000 barrels a day, will be back online in the second half of this month, Suncor said. Another, producing about 100,000 barrels, will return in the first half of August.
Suncor plans to update its financial forecasts for the year when it releases second-quarter results on July 25. The company owns about 59 per cent of Syncrude, and Imperial Oil Ltd. owns 25 per cent. The remainder of the operation is owned by China Petroleum & Chemical Corp. and CNOOC Ltd.’s Nexen.