Synthetic crude hits a record high in July

Synthetic crude hits a record high in July

According to the Alberta Energy Regulator (AER), production of synthetic crude oil (SCO) hit a record high of 1.246 million bbl/day in July, narrowly surpassing last November's high of 1.243 million bbl/day.

 
 

SCO is produced by upgrading bitumen recovered from six of Alberta's oil sands mining operations.

There are four bitumen upgraders in the province of Alberta, operated by Canadian Natural Resources (Horizon), Shell Canada (Scotford), Syncrude and Suncor Energy. SCO production statistics by operator are published by the AER at the end of every month, typically three months in arrears. July data for each individual upgrader will be available at the end of October.

Excluded from the AER's SCO data is output from Husky's Lloydminster Upgrader in Saskatchewan, which processes both bitumen and heavy oil produced from Husky's neighbouring production facilities.

DILBIT OUTPUT REMAINS CURTAILED

Non-upgraded bitumen production was reported at 1.77 million bbl/day in July, well below the old record high of 1.99 million, reached in April 2018. Most of those barrels are produced by the province's numerous in-situ operators, as well as two oil sands mining facilities — Imperial Oil's Kearl Mine and the relatively new Fort Hills Mine. Non-upgraded bitumen is mostly diluted with condensate, and sold directly to market as a heavy oil blend.

Due to the province’s ongoing curtailment program, producers are preferentially reducing heavy oil volumes to meet their prescribed production quotas. Synthetic crude typically sells at par with West Texas Intermediate (WTI), whereas heavy diluted bitumen currently sells at a US$12 discount to WTI.

 

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