Canadian Natural's Horizon producing above capacity
Wed Jul 8, 2009 3:52pm EDT
CALGARY, Alberta, July 8 (Reuters) - Canadian Natural Resources Ltd (CNQ.TO) has been ramping up production at its new Horizon oil sands project, recently seeing output of up to 120,000 barrels per day, a rate above the project's official capacity, the company's vice-chairman said on Wednesday.
Canadian Natural, the country's No. 2 independent oil exploration and production firm, has been working to boost output at the C$9.7 billion ($8.3 billion) Horizon project in northern Alberta, Canada's fourth major oil sands mining initiative.
Designed to produce 110,000 barrels of synthetic crude per day, Horizon has briefly been able to surpass that capacity, John Langille, the company's vice-chairman, told reporters at an industry investment conference.
However he cautioned the project is still in its early stages and the company still expects Horizon's output to average between 50,000 to 65,000 barrels a day this year.
As well, Langille said it's unlikely Canadian Natural will seek to boost operating rates beyond the design capacity of its project.
"You can probably run above nameplate (capacity) on any particular day," Langille said. "But you don't want to run ... at that on a full-time, consistent basis."
Horizon began operating at the end of February, months behind schedule and billions of dollars over its original budget.
The project includes a mine and an upgrader, which converts the tar-like bitumen stripped from the sand into refinery-ready synthetic crude.
Despite Horizon's cost overruns and delays, Langille said the start-up is going smoothly.
"We haven't had any issues of a technical or mechanical nature that are significant," he said. "With new equipment you never know if it's going to work the way it's supposed to. But so far we've been pleased with the experience... and we haven't had any major issues."
Canadian Natural shares were down C$1.91 at C$53.03 late on Wednesday on the Toronto Stock Exchange.
($1=$1.17 Canadian) (Reporting by Scott Haggett; editing by Peter Galloway)
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http://www.reuters.com/article/rbssEnergyNews/idUSN0840333620090708
