The 117,000 b/d Commerce City, Colo., refinery has become a key asset of Suncor Energy due to the facility's improved performance and its ability to supply the U.S. West Coast and nearby markets amid a fuel deficit following recent California refinery closures, says Chief Executive Rich Kruger.
During a second-quarter earnings call Wednesday, Kruger said he expects Suncor's refineries on Canada's West and East coasts to continue expanding their export capacity after the company boosted its jet fuel and diesel cargoes to overseas markets during the second quarter of the year.
Kruger told analysts that Suncor's team has improved operations and reliability at its 117,000 b/d Commerce City refinery near Denver while lowering costs. The refinery completed a turnaround during Q2 in 50 days, which was well under the 74 days similar work took in 2021, he said.
"That facility's value to us has grown materially based on their performance, and we think that is also sustainable," Kruger said.
Suncor's only U.S. refinery has, in the last several years, struggled to restart following shutdowns and experienced issues with obtaining federal air permits. The refinery supplies about a quarter of Colorado's gasoline, half the state's diesel and one third of the jet fuel used at Denver International Airport.
Executive Vice President of Downstream Dave Oldreive said during the call that that refinery reached an all-time high in production rates in June and again in July.
Oldreive said U.S. Mid Continent and West Texas refiners have been finding ways to move products into markets that had been historically supplied by California refineries, with Commerce City also starting use rail to load gasoline outside of Colorado.
"We see that as constructive for Commerce City's margins over time as those opportunities present themselves," he said.
Within the past 10 months, Phillips 66's 147,000 b/d Los Angeles and Valero Energy's 150,000 b/d Benicia refineries have both shut.
In eastern Canada, Oldreive said the company's 157,000 b/d Montreal refinery exported 22,000 b/d of jet fuel in Q2 and the plant can increase that capacity to 25,000 b/d.
"That's a structural capability that we can continue to do if the market is there," he said.
Suncor said its Q2 jet fuel sales rose to an all-time high of 51,000 b/d, up from its previous record of 27,000 b/d.
In addition, Oldreive said Suncor has been moving diesel production from its 159,000 b/d Edmonton, Alberta, refinery to its Burrad export terminal in British Columbia on Canada's West Coast via rail and pipeline. He added the company has increased the number of export cargoes to up to five per month, up from three or four a month last year.
Suncor, a Calgary-based integrated energy company and one of Canada's oil sands producers, said total upstream production fell to 760.9 million b/d in Q2, versus 808.1 million b/d in the year-ago quarter, citing the impact of record rain and snow melt on its oil sands operations.
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