Petro-Canadas base oil refinery in Mississauga, Ontario, will not return to full production until at least next week or possibly the following week, a spokesman said yesterday. The 12,500-barrel-per-day plant has been operating at half capacity since an explosion Aug. 21.
The company had originally projected an early October start-up, and market sources said that as late as last week they were expecting the sidelined production train to resume operations Oct. 10.
The spokesman said yesterday that repairs are near completion, and the plant is scheduled to return to full production in the latter part of October. Noting that the start-up process can take several days, he contended that the current schedule is not out of line with the companys initial projections.
All in all, I think this has been a pretty short period of time for repairs such as this, he said. The explosion occurred as staff was restarting the refinery from a weeklong shutdown caused by a blackout. The company said the explosion was triggered by a failure in a high-pressure hydrogen line.
Petro-Canada said it has not missed deliveries to any customers, thanks in part to purchases of base oil from other suppliers. Market observers said the delay in resumption of operations at Mississauga could further tighten North American supply of Group II base oils.
It all depends on whether they already have enough oil to get through this period or if they have to buy more oil on the open market, one purchaser said. If they have to buy more, that could snug things up.
Base oil posted prices were unchanged this week. The price of crude oil on the New York Mercantile Exchange closed at $31.66 per barrel yesterday, $1.20 higher than the week before.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.