Diesel shortage in Western Canada may be easing

CALGARY, Alberta, Nov 3 (Reuters) - Refinery restarts in Western Canada should ease a diesel shortage in the region that has left some stations dry and others rationing the fuel.

Two of the region's key suppliers of the fuel, Imperial Oil Ltd (IMO.TO) and Suncor Energy Inc (SU.TO) have recently restarted units that produce diesel, while a third refinery in the region operated by Petro-Canada (PCA.TO) has wrapped up a lengthy retooling operation and is poised for a slow return to service.

"In the near term, being weeks as opposed to months, things should be back to normal," said John Skowronski, director of environmental affairs for the Canadian Petroleum Products Institute. "It takes a while for product to get replenished into the system."

Diesel supplies were being rationed in the western provinces of Alberta, Saskatchewan and Manitoba for much of October because of the supply shortfall.

The shortage left trucking firms scrambling to find fuel and halting deliveries to some customers, according to media reports.

Imperial, the country's biggest oil producer and refiner, completed work at its 187,000 barrel per day Strathcona refinery in Edmonton, Alberta, this weekend and expects output of gasoline and diesel fuel to be back at normal rates in the next few days, spokesman Jon Harding said.

Suncor, which supplies the wholesale market, is now producing between 24,000 and 30,000 barrels a day of diesel at its Fort McMurray, Alberta, oil sands operations, following the restart of a hydrotreater last month.

Supplies of the fuel became tight when the two operations halted output while Petro-Canada's 135,000 bpd Edmonton refinery was operating at reduced rates because of a scheduled revamp to allow it to process crude from the oil sands.

It wrapped up the retooling this weekend but does not expect to reach full output until the first quarter of 2009. (Reporting by Scott Haggett and Jeffrey Jones; editing by Rob Wilson)