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Reuters: Shell Canada suspends production at oil sands mine

Feb 25th, 2006
by admin.

CALGARY, Alberta (Reuters) – Shell Canada Ltd. (SHC.TO: Quote) has halted production at its Muskeg River oil sands mine to repair a conveyor belt that was damaged on Friday, the company said.
The Calgary-based firm said bitumen production at the mine, which supplies feedstock to the Scotford upgrading refinery near Edmonton, Alberta, won't be restarted until it assesses the problem and a course of action can be determined.
The mine produced 178,000 barrels of bitumen a day during the fourth quarter, much of which was shipped to Scotford where it was converted to synthetic crude.
Janet Annesley, a spokeswoman for the majority-owned unit of Royal Dutch Shell Plc (RDSa.L: Quote), said the company has also reduced production at Scotford to the minimum needed to maintain critical systems, but would not specify current output.
“Production at the mine is being reduced and production at the upgrader has been reduced to a minimum,” she said. “We're hopeful that we'll be able to maintain some production.”
Annesley said workers at the mine site 75 km (45 miles) north of Fort McMurray, Alberta, noticed a tear in the conveyor belt, which Shell Canada says is the world's largest, on Friday morning. The company is trying to find out if the belt can be repaired or if it needs to be replaced by another that is on hand.
Annesley couldn't say how long the mine would be shut down for the repair. However Western Oil Sands Inc. (WTO.TO: Quote), which owns a 20 percent stake in the project, said in a release that replacing the belt would take four weeks.
Shell Canada said it will issue an update on the planned repairs early next week.
Chevron Corp. (CVX.N: Quote) is the third partner in the project with a 20 percent interest.

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