Production targets not at risk after Syncrude explosion, Suncor says

A fire and an explosion at a Syncrude upgrader north of Fort McMurray will not prevent oilsands giant Suncor from meeting its 2017 production targets, Suncor said Monday. Suncor is the largest partner in Syncrude.

Planned April shutdown starting earlier to minimize impact of unplanned outage

A fire which broke out at a Syncrude upgrader north of Fort McMurray has halted production at the site. (Pete Potipcoe/Facebook)

A fire and an explosion at a Syncrude upgrader north of Fort McMurray will not prevent oilsands giant Suncor from meeting its 2017 production targets, Suncor management said Monday.

Suncor, based in Calgary, is the largest partner in Syncrude. Suncor issued an update Monday on the recovery plan for Suncrude's Mildred Lake oilsands facility following a March 14 explosion and fire.

The incident shut down Syncrude's Mildred Lake oilsands upgrader, triggering an evacuation, and seriously injuring one worker.

It will take weeks to repair the damage and the company is overhauling its maintenance schedule to minimize the impact the unplanned outage may have on overall company output.

Suncor's 2017 guidance, issued Nov. 17, estimated it will produce the equivalent of between 680,000 and 720,000 barrels of oil per day, including between 150,000 and 165,000 from Syncrude.

While much of Syncrude's workforce returned a day after the fire, Imperial said in a separate statement Monday that there are no shipments of synthetic crude from the operation at this time.

An eight-week maintenance turnaround on the upgrader, originally set to begin in April, has been advanced, Suncor said in its statement Monday.

Meanwhile, beginning this week, Suncor will begin handling some of Syncrude's unprocessed shipments to help manage existing inventory.

Pipeline shipments of treated product are expected to resume at up to 50 per cent capacity in April, gradually ramping up to full rates after the turnaround is completed, the company said.

"Suncor has also seen strong production from its other oil sands assets and offshore operations," Suncor said.

"As a result, the company does not expect this outage to result in a change to Suncor's overall production guidance for 2017."

Preliminary investigation has determined a failure on a line near one of the hydrotreating units caused treated naphtha — a highly flammable hydrocarbon mixture —  to leak, triggering the fire which burned for nearly two days before it was extinguished. 

Damage has largely been isolated to a piperack adjacent to the hydrotreater, containing piping, cables, and electrical circuits, the company said.

The Alberta Energy Regulator and Occupational Health and Safety officials are conducting their own investigations.

As of last week, the injured Syncrude worker was still recovering in Edmonton hospital. Syncrude has declined to provide details on the nature of the employee's injuries citing privacy concerns. Suncor on Monday extended the worker "best wishes for a speedy recovery."

Another fire at the Mildred Lake site in August 2015 cut output from the facility by about 80 per cent. The fire damaged pipes, power and communication lines between two units of the upgrader. It returned to normal production the following October.

The Mildred Lake upgrader is located 40 kilometres north of Fort McMurray.

With files the Canadian Press