* Deep discounts seen persisting for months * $45-$50 break-even seen for conventional heavy oil * SAGD oil sands can produce at sub-$30 a barrel By Jeffrey Jones CALGARY, Alberta, Jan 15 (Reuters) - Canadian heavy oilprices, pressured by a combination of tight pipeline capacityand delays in a U.S. refinery retooling, have fallen close tothe trigger point for companies to begin shutting off someproduction, an analyst said on Tuesday. Prices for Western Canada Select (WCS) heavy blend, a widelyquoted grade, have fallen recently to around $50 a barrel, lessthan half the price of a barrel of international benchmarkBrent, pressuring the bottom lines of producers. With little in the way of new pipeline capacity expected inthe coming months, the deep discount is expected to persist,said FirstEnergy Capital Corp analyst Martin King. The first production that is likely to get shut down will betraditional heavy oil, in which low-volume wells pump crudewithout the aid of steam or other enhanced recovery, King said. "You've got to think that the more conventional heavy isprobably borderline right now," he told Reuters after speakingto an industry audience in Calgary. He said such supplies are likely to require a price of$45-$50 a barrel to generate positive cash flow. Higher-volume projects with enhanced recovery techniques andoil sands projects that use steam-assisted gravity drainage forextraction can probably keep producing at some price point below$30 a barrel, he said. "And that would have to be sustained a good many monthsbefore they even consider dialing it back," he said. Besides producing more efficiently, such developments aremore difficult to shut down, due to the need to keep steamingthe reservoirs to allow the crude to flow to the surface. WCS heavy crude for February delivery was last quoted at$38.25 a barrel under U.S. benchmark West Texas Intermediate,putting the absolute price at about $55.50 a barrel, accordingto Shorcan Energy Brokers. The price has weakened this month as pipeline space hastightened, especially after Enbridge Inc imposedmid-month apportionment on its Canada-United States system dueto technical glitches. This comes as Imperial Oil Ltd nears start-up of its 110,000 barrel a day Kearl oil sandsproject in northern Alberta. Indeed, Enbridge has begun to police its shippers moreclosely to make sure they deliver and receive supplies on timeto ensure that the network runs as efficiently as possible. FirstEnergy's King also cited reports last month that saidBP Plc had hit snags in the revamp of its 337,000 barrela day Whiting, Indiana, refinery, a much-anticipated projectthat includes adding a 120,000 bpd coker unit that will boostdemand for Canadian heavy oil. Such problems could push the refinery's start-up back tomid-year or beyond from the previous target of March, he said. Large, longer-term pipeline expansions by Enbridge,TransCanada Corp and others are not expected to beginuntil at least the second half of this year. "The industry's got to start wrapping its head aroundlooking at wider differential for longer - certainly for atleast the first half of this year," King said. For WCS pricing, he currently projects an average $20 perbarrel discount to WTI for 2013, but cautioned that may deepenby $5 to $7.