CANADA CRUDE-Heavy Canadian crude languishes near multi-year lows

(Corrects spelling of analyst's last name to Forrest, not Forest, paragraph 9)

* Sept WCS trades at $19.45/bbl below WTI

* Sept synthetic trades at $4.75/bbl below WTI

By Nia Williams

CALGARY, Alberta, Aug 13 (Reuters) - The outright price of Canadian heavy crude was mired near its lowest level in at least a decade on Thursday, keeping pressure on producers in western Canada who are increasingly hard pressed to cover production, transportation and blending costs.

The discount on Western Canada Select heavy blend crude for September delivery narrowed slightly after Enbridge Inc (Toronto: ENB.TO - news) reopened its 600,000 barrel per day Flanagan South pipeline in the U.S (Other OTC: UBGXF - news) . Midwest.

Flanagan South is one of the key conduits for Canadian crude to reach the U.S. oil futures hub at Cushing, Oklahoma, and the Gulf Coast.

Its closure along with the adjacent Spearhead line after a spill on Tuesday prompted a blow out in WCS differentials to their widest level this year at $21.75 per barrel below the West Texas Intermediate benchmark.

WCS last traded at $19.45 per barrel below U.S. benchmark, according to Shorcan Energy brokers, tightening from a settlement of $19.90 per barrel below on Wednesday.

That put the outright price of Canadian crude at around $22.78 a barrel, with U.S. crude closing down 3 percent at $42.23 a barrel after data showed a big rise in key U.S. crude stockpiles.

On Wednesday the outright price of Canadian crude slumped intra-day to around $22.50 a barrel.

Canada's oil sands hold the world's third largest crude reserves after Saudi Arabia and Venezuela, but carry high operating costs because of energy-intensive production methods.

ARC Financial analyst Jackie Forrest estimated the average cash costs for a thermal oil sands would be in the range of $25 a barrel, once operating costs, blending costs and the cost of transporting crude to the marketing hub of Hardisty, Alberta, are combined.

WCS differentials also came under pressure this week from unplanned maintenance at BP Plc's Whiting, Indiana, refinery, which is one of the largest consumers of Canadian heavy crude.

Light (Stuttgart: 5LIA.SG - news) synthetic crude from the oil sands for September delivery narrowed to $4.75 per barrel below WTI from Wednesday's settlement of $5.15 a barrel below the benchmark. (Editing by David Gregorio)