Syncrude Canada Ltd.’s Mildred Lake facility is still processing bitumen but is operating at “minimum rates” one day after an explosion and fire seriously injured one person and triggered an evacuation at the oil sands site.
The fire that continued in a controlled burn Wednesday afternoon likely caused Canadian prices for crude from the oil sands to jump. Syncrude’s brand of light synthetic crude last sold for $1.50 (U.S.) a barrel over West Texas intermediate, up from 25 cents a barrel over WTI just before word of the fire spread through the market on Tuesday afternoon, according to oil broker Net Energy Inc.
A spokeswoman for Suncor Energy Inc., the largest interest holder of Syncrude, said the plant located 40 kilometres north of Fort McMurray, Alta., is processing bitumen below the nameplate, or maximum, capacity of 350,000 barrels a day.
“The next steps will be for Syncrude to better understand the nature of the situation and the nature of the damage,” Suncor spokeswoman Sneh Seetal said Wednesday, noting she cannot yet provide specific production figures.
Part of Syncrude’s Mildred Lake upgrading complex exploded and caught fire around 2 p.m. Tuesday.
On Wednesday, Syncrude spokesman Will Gibson said the fire was the result of a line failure that caused a leak of naphtha, a flammable oil, in the hydrotreating area of the plant, a secondary upgrading process that removes sulphur and nitrogen.
Even while most Syncrude employees had returned to work at the site on Wednesday, a controlled and contained burn continued – a strategy emergency crews deemed the best way to consume residual hydrocarbons and reduce the fire load, Mr. Gibson said.
Over the years, Syncrude has been plagued by operational mishaps and outages but had recently improved its operational performance. The oil sands firm is responsible for about 13 per cent of Canada’s daily raw bitumen production, and its upgrader turns processed bitumen into light synthetic crude that is shipped to refineries around the continent.
Mr. Gibson said the focus is now on assessing the damage at the upgrading complex and stabilizing the plant. The company will also begin an investigation into the incident.
Last year, Suncor became its largest interest holder, with 55 per cent. The other partners are Imperial Oil Ltd. (25 per cent), Sinopec Ltd. (9 per cent), Nexen Energy (7 per cent) and Mocal Energy Ltd. (5 per cent).
Last spring, the oil sands operation was among several that were shut down as a precaution when wildfires raged through the region, damaging large swathes of Fort McMurray and the surrounding forests.
With a file from Jeffrey JonesReport Typo/Error