Syncrude, Shell cut deliveries due to fire: UpdateOREANDA-NEWS. May 12, 2016. Syncrude Canada and Shell Canada have cut May crude deliveries because of wildfire-related outages in northern Alberta, but some oil sands production is starting to come back online.

The massive fire, which continues to burn to the west of the oil sands hub of Fort McMurray, resulted in the largest disruption of crude oil production in Canadian history, said Martin King with FirstEnergy Capital in Calgary. An estimated 1.3mn b/d of production was offline in recent days as operators shut down mining operations and pipelines because of approaching flames and a shortage of workers.

Shell began restarting production at reduced rates on 9 May at its Albian Sands mining operation, which supplies the company's 255,000 b/d Scotford upgrader, after shutting production on 3 May. The producer said it is flying in workers now, after helping more than 8,000 people fly out during the height of the emergency. The Scotford upgrader produced 276,514 b/d of SCO in January.

After shutting down its 350,000 b/d capacity Aurora and Mildred Lake facilities late last week, Syncrude Canada said it turned on power generation at Aurora yesterday and has started to bring back non-essential workers to support a ramp-up of operations. Syncrude produced 297,887 b/d of synthetic crude oil (SCO) in January, the most recent month for which Alberta Energy Regulator data are available.

King said most of the producers could have their operations back up and running within days, but the challenge will be integrating all the moving parts that come after production, such as co-generation plants, pipelines and diluent supply.

About 15pc of the city of Fort McMurray was destroyed, including about 2,400 homes. City officials say it could be weeks before water, power and natural gas systems are fully restored — all of which could impact the availability of workers for oil sands operations.

Some operations south of the city, such as Nexen's Long Lake thermal project, which saw fires come close or pass through sites can't assess possible damage because of safety issues.

Husky Energy said today restart of operations would depend on a number of factors, including worker safety. The integrated producer's Sunrise thermal operation fully suspended operations Tuesday after reducing production to 10,000 from 30,000 b/d late last week.

Enbridge said late yesterday its Athabasca and Cheecham terminals were "largely" unaffected by the fires, but some above-ground valves along pipeline corridors had sustained limited damage. The Cheecham terminal remains shut down, curtailing transportation of bitumen and blends out of the region.

Syncrude climbed today to a premium of \\$1/bl to June CMA Nymex WTI from a premium of 65?/bl yesterday. The grade's premium reached \\$2.50/bl on 6 May.

Canadian light synthetic grades are between 31.0-37.9° API and 0.06-0.20pc sulphur.

Husky Energy's 170,000 b/d refinery in Lima, Ohio, took 49,975 b/d of Canadian crude above 32° API and below 0.20pc sulphur during the twelve months through February.

PBF's 170,000 b/d refinery in Toledo, Ohio, took 47,282 b/d. The facility remains dependent on Syncrude, chief executive Tom Nimbley said during the company's first quarter earnings call on 28 April.

BP's 157,000 b/d refinery in Toledo took 16,685 b/d. BP operates the refinery in a joint venture with Husky. BP's 410,000 b/d refinery in Whiting, Indiana, took 11,419 b/d.