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Reuters: Shell seeks oil supply amid Alberta plant woes

Mon Mar 10, 2008 6:22pm GMT

CALGARY, Alberta (Reuters) – Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research) lined up alternative supplies of upgraded oil sands crude for its Alberta refinery on Monday as its own upgrading plant underwent unplanned maintenance, a spokesman said.

Meanwhile, Shell and Imperial Oil Ltd (IMO.TO: Quote, Profile, Research) kept rationing fuel supplies to their retail networks as both their Edmonton-area refineries suffered unspecified operational problems which came to light last week.

The refinery hiccups have squeezed gasoline and diesel supplies across western Canada, and contributed to sharp gains in pump prices. Neither Shell nor Imperial have disclosed how much production has been cut or given target dates for resuming full output.

“We are working around the clock to address this, both on the refinery side and the upgrader side,” Shell spokesman Randy Provencal said.

As the company repairs the 155,000 barrel a day upgrader, which normally runs extra-heavy bitumen from the Athabasca Oil Sands Project in northern Alberta, it is seeking upgraded supplies from other operators, such as Syncrude Canada Ltd and Suncor Energy Inc (SU.TO: Quote, Profile, Research), Provencal said.

“We continue to work to secure those feedstocks,” he said.

Shell has reduced fuel allocations to its retail stations and commercial customers as it also works on its 98,000 barrel a day Scotford refinery, but outlets are not running dry, he said.

The upgrader normally feeds the adjacent refinery.

For its part, Imperial’s 187,000 barrel a day Strathcona refinery may undergo repairs for the “next few weeks,” spokesman Gordon Wong said.

Imperial, which runs 532 Esso-brand gas stations in Western Canada, is working to secure alternative supplies from elsewhere in Canada and through imports, Wong said.

(Reporting by Jeffrey Jones; editing by Renato Andrade)

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