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UPDATE 1-Canadian Oil Sands halts Syncrude production after fire, prices spike

Published 2015-08-31, 10:34 a/m
© Reuters. UPDATE 1-Canadian Oil Sands halts Syncrude production after fire, prices spike
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(Updates with market impact)
Aug 31 (Reuters) - Canadian Oil Sands Ltd COS.TO , the
biggest shareholder in the Syncrude oil sands project, said it
halted crude oil production after a fire damaged equipment at
its processing facility in northern Alberta on Saturday, causing
traders to scramble to secure temporarily short supply.
The company said the main coker conversion units were not
damaged and Syncrude continues to operate. However, it suspended
synthetic crude oil production and is developing a recovery
plan, Canadian Oil Sands said late on Sunday.
Synthetic crude for September delivery traded as
strong as $2 a barrel below U.S. crude futures on Monday
morning, according to Shorcan Energy brokers, up from a discount
of about $4.60 a barrel last week.
The operator of Canada's largest synthetic crude project
said on Saturday it was investigating the causes of an early
morning fire at an upgrading plant.
The fire broke out a few hours after the province's energy
regulator announced it was shutting in 95 pipelines operated by
Nexen, one of the partners in the project, because of safety
issues identified following a large oil-related spill in July.
Syncrude is a 326,000 barrel-per-day mining and upgrading
project, where mined oil sands bitumen is upgraded into
refinery-ready synthetic crude. It produced an average of
261,500 bpd this year to date, according to its website.
The operations are a joint venture of seven partners:
Canadian Oil Sands Ltd COS.TO , Suncor Energy Inc SU.TO ,
Imperial Oil Ltd IMO.TO , Nippon Oil subsidiary Mocal Energy
Ltd 5020.T , Murphy Oil Corp (NYSE:MUR) MUR.N , China's Sinopec
600028.SS , and CNOOC subsidiary 0883.HK Nexen.

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