Shell suspends production at Muskeg River Mine because of unscheduled maintenance

CALGARY (CP) - Shell Canada Ltd. (TSX:SHC) has suspended bitumen production at its Muskeg River Mine oilsands operation in northern Alberta to do unscheduled maintenance on a large conveyor belt that broke Friday.

The Calgary oil and natural gas giant said late Friday that bitumen production at the mine has been shut down and will remain suspended until a full damage assessment can be completed and a fix determined.

Synthetic crude oil production at the Scotford upgrader near Edmonton has been reduced pending the resumption of bitumen production from the mine. The company gave no details on how much oil production it expects to lose from its key oilsands operation, the company's main source of crude oil in Canada.

Shell Canada said a major tear was discovered early Friday in the conveyor belt that transports ore from the crushers at the Muskeg River Mine to a nearby bitumen extraction plant.

The Muskeg mine is about 75 kilometres north of Fort McMurray. Along with the Scotford refinery, the mine makes up the Athabasca Oil Sands Project, a joint venture among Shell Canada, with 60 per cent, Chevron Canada Ltd., with 20 per cent, and Western Oil Sands L.P., with 20 per cent.

The Canadian Press, 2006