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A watery answer?
Irving Oil launches first tanker load of Alberta crude from Vancouver through Panama Canal to its Atlantic Canada refineries Gary Park for Petroleum News
A new means of shipping oil sands crude from Alberta to Atlantic Canada is getting its first trial run.
If successful it could also rescue Alberta producers from the distress of sitting on a treasure trove of resource riches.
It could even be the only answer as the province watches its hopes for Keystone XL fade, following those of Enbridge’s Northern Gateway link to Asia and TC Energy’s (formerly TransCanada) Energy East proposal to connect with buyers in Europe and the Middle East.
The despair of the pipeline sector was reinforced earlier in July when a U.S. court ordered a shutdown of the Dakota Access line from North Dakota to Illinois and the decision by Duke Energy and Dominion Energy to scrap their Atlantic Coast Pipeline because of cost and regulatory challenges.
Turning to the high seas Turning from the overland option to the high seas, Calgary-based oil sands major Cenovus Energy said it delivered a shipment through the existing 980-mileTrans Mountain pipeline for loading at Burnaby in the Greater Vancouver area.
That was to be followed by a 7,400-mile voyage on the tanker Cabo de Hornos to the Irving Oil refinery at Saint John, New Brunswick. The vessel has capacity of 74,543 deadweight metric tons.
Irving, with approval from Canadian regulators, chartered the Cabo de Hornos to test the ability of producers to access a new outlet.
Cenovus said the chance to refine more Canadian oil in Canada could create “economic value and improved energy security.”
“We believe this success story demonstrates the ability of two companies to help drive Canada’s economy with innovative solutions, even during these unprecedented times on turbulence created by COVID-19,” the company said.
Cenovus executive vice-president Keith Chiasson said his company was “pleased with the economics of this transaction.”
He said the deal is a “one-off shipment for now, but we believe that (it offers) the potential over time to create significant value for both companies and the entire country.”
Relief of stress point If a long-haul tanker delivery is shown to work it would relieve a stress point for producers who have contracted space on Trans Mountain once the system expands its capacity to 890,000 barrels per day from 300,000 bpd in another two years.
Irving has given no indication of how many oil sands producers have agreed to ship crude to its 320,000 bpd Saint John refinery, the largest in Canada.
Irving applied to Transport Canada in May to use foreign ships to source Canadian oil shipments, surprising many analysts with its claim that using a route through the Panama Canal was economically feasible.
In addition to its New Brunswick refinery, Irving has added to its capacity in the region by purchasing the only refinery in Newfoundland calling the transaction a “building block” in a larger strategy to source and process more Canadian crude.
A spokesperson for Irving said the elements “contribute to our long-term objective of helping Canada be even more competitive in the international landscape.”
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