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Suncor's Syncrude Facility to Hit Full Capacity in September

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Suncor Energy Inc. (SU - Free Report) recently announced that its Syncrude oil sands project in Alberta is likely to resume full production in September. Following a power outage in Jun 20, the Syncrude project went offline. The disruption resulted from a transformer trip that caused power loss and steam generation. While no casualty was recorded from the outage, all the process units of the facility have been shut down since then. Notably, the power and steam systems have been restored, while the repair and maintenance activities are underway.

Earlier, the facility was expected to remain shut throughout July. However, one of the coker units, — which help in the conversion of bitumen to synthetic crude oil — with a production capacity of around 150,000 barrels per day (bpd), is expected to resume service sometime this month. Further, a second coker, with around 100,000 bpd production capacity, will become functional in August. The company expects the pipeline shipments to account for approximately 60-70% of the total capacity in August. However, Syncrude’s third coker unit will take longer to be repaired, after which production would ramp up to full capacity in September.

Suncor is the majority stakeholder in the Syncrude project, with 58.7% stake. Other co-partners include Imperial Oil Limited (IMO - Free Report) , China’s state-controlled Sinopec and Nexen oil sands partnership, holding 25%, 9.03% and 7.23% interest, respectively.

Notably, Syncrude — with a production capacity of around 360,000 bpd — represents approximately 10% of the total Canadian oil output. With the facility’s shutdown, crude supplies have tightened and may remain the same for some more time. This has also pushed up the crude prices of late along with easing the pipeline congestion issues to some extent.

Zacks Rank and Another Stock to Consider

Suncor currently carries a Zacks Rank #2 (Buy).

Meanwhile, one can also consider Bonanza Creek Energy, Inc. , which is a Zacks Ranked #1 (Strong Buy) player in the energy space. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bonanza Creek delivered an average positive earnings surprise of 215.36% in the last four quarters.

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