Syncrude declares force majeure after fire

NEW YORK • The Syncrude oilsands facility has declared force majeure after a fire on Sunday at the plant, its majority owner Suncor Energy Inc. said on Friday.

Syncrude is a joint venture in which Imperial Oil Ltd. and others hold minority stakes. The Alberta facility upgrades thick bitumen to light oil.

Canada is the world’s fourth- largest oil producer and Syncrude’s nameplate capacity of up to 360,000 barrels per day ( bpd) represents about 7 per cent of the country’s supply.

Suncor spokeswoman Sneh Seetal confirmed that Syncrude declared force majeure but declined to give details, saying they are commercially sensitive.

Sources familiar with the matter had earlier noted the force majeure declaration and said Syncrude had told customers it will reduce production by about 20 per cent.

The fire happened on Sunday in one of Syncrude’s hydroprocessing units at its Mildred Lake, Alta., upgrading facility, spokesman Will Gibson said. He said the building was empty at the time of the fire, and its cause is unknown. No one was injured, he said.

Force majeure is a declaration that unforeseeable circumstances prevent a party from fulfilling a contract.

Canadian oil prices strengthened due to the production cuts, with light synthetic crude for March delivery flipping from a discount to trade at a premium of US$ 3.50 per barrel over West Texas Intermediate ( WTI) on Thursday, market sources said. Prices for April strengthened to settle at US$3.10 over WTI on Thursday, wider than Wednesday’s settle of US$ 2.10 over, according to NE2 Canada Inc. The contract traded at US$2.90 on Friday.