Canada crude-Synthetic premium rises on Syncrude problems

Mon Dec 10, 2012 4:53pm EST

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* Light synthetic for January last at $2.50/bbl over WTI

* January WCS last seen at $32/bbl under WTI

CALGARY, Alberta Dec 10 (Reuters) - Canadian light synthetic crude rose on Monday after the chief executive of Canadian Oil Sands Ltd, Syncrude Canada's biggest shareholder, said the northern Alberta project was still having production problems.

Synthetic crude for January delivery last traded at a premium of $2.50 per barrel above the West Texas Intermediate benchmark, according to Shorcan Energy Brokers, up from Friday's settlement price of $1.25 per barrel above the benchmark.

Marcel Coutu, whose company owns 36.7 percent of the Syncrude joint venture, said the oil sands project, capable of producing 350,000 barrels per day of synthetic crude, was still working through problems with the ore crushing and extraction process..

Coutu did not detail how much production was affected by the operating issues. However sources told Reuters last week that Syncrude had warned customers that its December output would be 400,000 barrels lower than expected as cold weather affected its operations.

Western Canada Select blend heavy crude for January delivery last traded at a $32 per barrel discount to West Texas Intermediate, compared with Friday's settlement price of $32.75 per barrel under the benchmark.

The discount narrowed as Phillips 66 said it had completed planned maintenance work at the 146,000 barrel per day refinery at Borger, Texas, it co-owns with Cenovus Energy Inc .

As well, Genscape reported that CVR Energy Inc restarted a 26,000 bpd coker at its Coffeyville, Kansas, refinery that had been shut on Dec 6.

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