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Bloomberg: Shell Says Canada Fuel Supply `Tight’ on Lower Runs (Update1)

By Eduard Gismatullin

March 7 (Bloomberg) — Royal Dutch Shell Plc, Europe’s largest oil company, said fuel supply in western Canada is “tight” because of lower output from refineries.

Shell cut crude processing at its Scotford refinery in Alberta because of reduced supply from a plant used to convert oil sands into crude. The drop will further trim fuel supplies in the region after “operating issues” curbed output at Imperial Oil Ltd.’s Edmonton, Alberta, refinery.

The 100,000-barrel-a-day Scotford plant reduced throughput after deliveries were cut from the nearby Scotford upgrader, which converts bitumen extracted from Alberta’s oil sands into refinery-ready crude. The 155,000-barrel-a-day upgrader reduced runs because of “unplanned maintenance,” Olga Gorodilina, a London-based spokeswoman at Shell, said today by telephone.

“This disruption to supply, combined with strong customer demand for our products and overall tight industry supply, has prompted Shell to initiate equitable allocations of gasoline and diesel” to some retailers in western Canada, Gorodilina said.

Imperial Oil, Canada’s largest refiner, expects “sporadic outages” for several weeks at local fuel outlets, spokesman Gordon Wong said yesterday.

The Muskeg River Mine, which supplies bitumen to Shell’s Scotford upgrader and has the same capacity, has also reduced production, Gorodilina said. She declined to provide details on the current rate of output at the refinery, upgrader and mine.

“We can’t speculate when we will be back to full rates,” she said.

To contact the reporter on this story: Eduard Gismatullin in London at [email protected]

Last Updated: March 7, 2008 05:33 EST

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