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The shutdown of a Syncrude facility in the Canadian oil sands after a transformer blew tightened supplies and put upward pressure on prices Tuesday.
The bitumen upgrading plant north of Fort McMurray, Alberta typically produces 350,000 barrels of oil per day, but it had already scaled back output to less than half that amount for scheduled maintenance before the company shut it down completely on June 20.
‘Syncrude experienced a site-wide power disruption resulting in a complete shutdown of all processing units,’ Suncor spokeswoman Sneh Seetal told AFP. Suncor is the main shareholder in a joint venture that owns the plant operated by Syncrude.
‘The full investigation into the cause is ongoing, however preliminary investigation results indicate that the cause of the disruption was a transformer trip,’ she said.
As a result, there have been ‘no shipments of synthetic crude from the operation at this time.’
Canada is the world’s sixth largest oil producer.
North American crude prices rose after Syncrude announced the shutdown, but the Canadian news was quickly overtaken by concerns that Russia and Saudi Arabia plan to boost production, and a US warning to stop buying Iranian oil or face economic sanctions.
Analysts, meanwhile, predicted that record continental oil production would quickly make up the shortfall.
Several reports suggested the Syncrude plant may be back up and running in late July at the earliest. However, Seetal said no date has been announced yet for the resumption of operations.