UPDATE 2-Husky upgrader running at reduced rates after fire * Feb. 2 fire caused minor damage, company says * Declines to specify current output * Seen as factor behind wide synthetic crude premium CALGARY, Alberta, Feb 7, 2011 (Reuters) – Husky Energy Inc’s Western Canadian heavy-oil upgrading plant is running at reduced rates following a small fire at the facility, a spokesman said on Monday. The 82,000 barrel a day plant at Lloydminster, on the Alberta-Saskatchewan border, did not suffer extensive damage in the Feb. 2 blaze, but it is not known how long repairs will take, Husky’s Graham White said. “We’re continuing with reduced production rates, but the plant is continuing to operate,” White said. He declined to specify current volumes at the plant, which turns heavy crude into refinery-ready synthetic light oil. The coker, which is the main processing unit, was not damaged, White said. The fire was contained in a plant that provides product to that unit.
The situation was a factor in keeping cash prices for Canadian synthetic crude at a hefty premium to U.S. benchmark light oil, market sources said. The synthetic market has been lifted in recent weeks by a much more damaging upgrader fire at Canadian Natural Resources Ltd’s Horizon oil sands plant in early January. That operation remains idle with company crews gaining access to the site just last week. Meanwhile, the market has also strengthened in line with crudes with similar characteristics, such as Louisiana Light Sweet, sources have said. (Reporting by Jeffrey Jones; editing by Rob Wilson)