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UPDATE 2-Shell rationing gasoline, diesel in Western Canada

Tue Feb 12, 2008 4:09pm EST

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(Adds status of Shell oil sands project, Imperial Oil comments)

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CALGARY, Alberta, Feb 12 (Reuters) - Royal Dutch Shell Plc's (RDSa.L) refinery in Alberta is running at reduced rates, forcing the company to ration fuel to its own Western Canadian retail network and to commercial customers, a spokeswoman said on Tuesday.

There is no indication yet when the 98,000 barrel a day Scotford refinery near Edmonton will be back at full rates, Shell spokeswoman Jana Masters said.

Masters declined to say how much fuel the plant is producing or whether mechanical problems were causing the fuel shortages, which are affecting Saskatchewan, Alberta and northern British Columbia.

"I can't give you any kind of number but I can tell you that Shell has initiated equitable allocations on gasoline and diesel," Masters said.

Local media reports said some Saskatchewan gas stations have reported low inventories.

The refinery is supplied by the adjacent Scotford upgrader, which turns oil sands-derived crude from northern Alberta's Athabasca project into synthetic oil. That plant was shut down for much of November and December following a fire.

This time, the oil sands operations have not contributed to the refinery problems, another Shell spokeswoman said.

"From an oil sands perspective, it's business as usual at the mine and the upgrader," Shell's Janet Annesley said.

Other oil companies with refineries in the Edmonton area reported tight petroleum product supplies but not to the point of requiring rationing.

Petro-Canada's PCA.TO refining and retail operations have not been negatively affected by the Shell situation and there has been some discussion about providing some product to make up the shortfall, said Kelli Stevens, a Petro-Canada spokeswoman.

Imperial Oil Ltd (IMO.TO) said it is supplying all of its customers from its Strathcona, Alberta, refinery.

"We did experience a minor problem with the catalytic cracker unit at Strathcona last week, but that has since been rectified," Imperial spokesman Pius Rolheiser said. (Reporting by Jeffrey Jones; Editing by Rob Wilson)



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