“We have a policy to not comment on rumours and speculation,” Suncor Spokeswoman Sneh Seetal told Lube Report.

Petro-Canada and Suncor merged in 2009, with the Calgary, Alberta-based companies agreeing the combined entity would operate corporately under the Suncor name, while continuing to use the Petro-Canada brand for refined products.

According to its website, Petro-Canada acquired its lubricants business from Gulf Canada in 1985. Petro-Canada bills itself as the world’s largest producer of pharmaceutical-grade white oils and the leading supplier of factory fill automatic transmission fluids. Petro-Canada blends and packages more than 350 different lubricants, specialty fluids and greases.

Petro-Canada operates a base oil plant in Mississauga, Canada, with 11,600 barrels per day of API Group II capacity and 4,000 b/d of Group III capacity.

Amy Claxton, principal of consultancy My Energy in Hummelstown, Pa., said the news report that Suncor intends to divest the Petro-Canada Lubricants division comes as no surprise and is long overdue.

Claxton noted the Missassauga base oil refinery was acquired by Suncor via its merger with Petro-Canada, which was approved by the Canadian Competition Bureau and completed in August 2009. Petro-Canada has a legacy of base oil and finished lubricants expertise, but the Missassauga refinery has been defensive for decades in terms of raw material acquisition costs and operating cost due to its multi-train base oil operation, she said.

The Missassauga refinery became a stand-alone – base oils only – plant in 1993, requiring outside feedstock sourcing, and is one of the highest cost North American base oil manufacturing facilities, she noted, including Group I solvent processing and Group II/III hydro-processing plants. Feedstock to Missassauga was further constrained with the 2005 closure of Petro-Canadas Oakville, Ontario refinery, and the introduction of oil sands feedstocks to the Montreal refinery after the Suncor acquisition in 2009, Claxton added.

She described Suncor as a well-run integrated oil company with a focus on monetizing Canadas oil sands, with oil sand feedstocks providing between 20 percent and 100 percent of the feed to Suncors four refineries.

The oil sands material is not compatible as feed for paraffinic or naphthenic base oil manufacturing, Claxton pointed out. The Suncor Montreal refinery, which in part provides feedstock for the Missassauga base oil refinery runs about 30 percent oil sands feedstock, and could be further optimized to run more cost-effective oil sands if it were no longer required to provide feedstock for the Missassauga methyl ethyl ketone/white oil train portion of the base oil refinery.

Suncor is the surviving entity of what was Sun Oil, Canadian Oil, and the Great Canadian Oil Sands Project, she noted.