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December 30, 2006 at 12:27 pm #4090
CALGARY, Alberta, Dec 12 (Reuters) – A major processing unit at the Syncrude Canada oil sands venture will undergo a maintenance turnaround more than half a year ahead of schedule, Syncrude’s largest interest owner said on Tuesday.
Canadian Oil Sands Trust (COS_u.TO: Quote, Profile , Research) said a coker unit, called 8-2, will be offline for about 1-1/2 months, resulting in the loss of 2 million-3 million barrels of production.
Syncrude started maintenance on the unit, which upgrades the tar-like crude from the oil sands into synthetic oil, in late November. It finished the repairs but had problems restarting the unit, the trust said.
The venture operators decided a complete outage was needed to clean the unit’s internal coke deposit before it can go back into service. The outage is expected to last until late January.
The work will cost C$40 million to C$50 million ($35 million to $43 million), the trust said.
The next major turnaround on the unit was scheduled for the third quarter of 2007 and Canadian Oil Sands said it may still have to shut it down again next autumn.
The outage is not expected to reduce the trust’s production target for Syncrude in 2006 of 95 million barrels and for 2007 of 110 million barrels, it said.
Syncrude Canada, located north of Fort McMurray, Alberta, is the world’s largest producer of synthetic crude oil.
Canadian Oil Sands’ partners are Imperial Oil Ltd., Petro-Canada, ConocoPhillips, Nexen Inc., Nippon Oil Corp. unit Mocal Energy Ltd. and Murphy Oil Corp.
December 30, 2006 at 12:30 pm #7497
CALGARY (CP) Dec 12, 2006 – Repairing one of Syncrude’s three cokers is more difficult than expected and an early maintenance shutdown to fix the problem will result in $40 million to $50 million in extra costs, Canadian Oil Sands Trust (TSX:COS.UN) said Tuesday.
Syncrude’s coker 8-2 unit had been expected to return to operation quickly after what was described on Nov. 20 as a minor repair.
But Canadian Oil Sands Trust, the largest partner in the Syncrude consortium, said Tuesday that restarting the processing unit has been “challenging.”
Syncrude decided a complete outage is needed to clean the vessel before restarting the coker, which heats bitumen and breaks it down for further processing.
Cleaning the clogged coker will keep the unit out of commission until late January. That will cut production by two million to three million barrels, the trust said in a release.
But Canadian Oil Sands said the shutdown at the site near Fort McMurray, Alta., won’t impact production forecasts. Syncrude is still expected to produce about eight million barrels this month for annual production of between 94 million and 95 million barrels, rising to 110 million in 2007.
The coker unit had been scheduled for major maintenance next autumn, and this is still expected to go ahead.
Syncrude “will incur additional costs of approximately $40 million to $50 million associated with this unscheduled maintenance over the turnaround period, which will result in modest increases in per-barrel operating costs in both years,” Tuesday evening’s statement said.
However, one investment analyst said the shutdown won’t seriously affect the trust’s unit price.
“The market is so in love with oilsands assets right now that minor cost increases don’t seem to matter,” said Menal Patel of National Bank Financial. “This is a one-time cost on a 50-year project. And with $60 (US per barrel) oil, it doesn’t matter.”
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