* ConocoPhillips reduces output at Surmont by 40 percent -
* Nexen reduces output at Long Lake by 48 percent - sources
* Syncrude's outage has forced other plants to reduce output
* Cash crude grades trade at multi-year highs on cuts
(Updates with Nexen production cut figure)
By Nia Williams and Catherine Ngai
CALGARY, Alberta/NEW YORK, April 6 Two oil sands
producers in northern Alberta have cut production at their
facilities due to a shortage of synthetic crude, market sources
said on Thursday, causing Canadian and U.S. crude prices to
surge to multi-year highs.
Synthetic supplies are scarce following a fire at the
350,000 barrel-per-day (bpd) Syncrude plant in March that
damaged the facility and forced the operator to bring forward
maintenance and cut production for April to zero.
As a result ConocoPhillips reduced output at its
140,000 bpd Surmont project, a joint venture with Total E&P
Canada, by 40 percent, two market sources said. They
spoke on condition of anonymity because they are not authorized
to speak to the media.
The company mixes synthetic crude from Syncrude with tarry
bitumen from its oil sands reservoir to create a heavy crude
blend known as "synbit" that can flow through pipelines.
CNOOC Ltd subsidiary Nexen Energy, which likewise
uses synthetic crude to dilute its bitumen, cut output from its
Long Lake oil sands project this month by 48 percent, said one
of the two sources, as well as two separate sources.
Long Lake usually produces around 40,000 bpd of undiluted
bitumen, one source said.
ConocoPhillips spokeswoman Michelle McCullagh, who earlier
this week confirmed that the Syncrude outage affected Surmont
output, declined to comment on the size of the production cut.
Nexen Energy spokeswoman Brittney Price said her company
does not publish production or maintenance operations for
Syncrude, a joint venture majority-owned by Suncor Energy
Inc, is expected to return to operations the first week
of May but will be running at reduced rates that month, trading
sources said on Wednesday.
The oil sands outages have boosted Canadian heavy crude
prices, with the benchmark Western Canada Select blend for May
delivery last trading close to a 22-month high of $9.60 a barrel
below U.S. crude, according to Shorcan Energy brokers.
On Wednesday WCS settled at $9.85 per barrel below U.S.
Meanwhile, Mars Sour WTC-MRS traded up to $1.20 a barrel
discount to U.S. crude on Thursday, the narrowest discount since
September 2015, according to Reuters data. Light Louisiana Sweet
WTC-LLS traded up to $2.35 a barrel over WTI, the widest
premium since March 2016.
(Editing by Matthew Lewis and Chris Reese)