One rumor doing the rounds among crude traders and refinery analysts about the deadly aftermath of the train crash in the Quebec town of Lac-Megantic has been put to rest.
When five of the 72 derailed tanker cars caught fire leading to a series of explosions that killed an estimated 50 people and wiped out scores of houses and commercial buildings, speculation took flight that the cars must have contained butane or propane along with 50,000 barrels of light crude from the North Dakota Bakken.
It needed only a quick statement from an official with Canada’s Transportation Safety Board, or TSB, to scuttle that theory, even though the rumor persists.
Glen Piton said the train being hauled by Chicago-based Montreal, Maine & Atlantic Railway was carrying only crude.
He said many buildings in the heart of Lac-Megantic use butane for cooking and that gas was ignited by the train fire, setting off the explosions.
Although Piton was not sure what types of Bakken crude comprised the shipment, a spokeswoman for Continental Resources, one of the leading Bakken producers, said the crude quality is consistent throughout the formation.
She said that where Continental operates the crude gravity is in the low-40s, low sulphur and no hydrogen sulphide.
Bakken prices not affected
The disaster has not affected Bakken crude prices, while refinery experts do not believe there will be any impact on supplies to U.S. East Coast refineries.
Rail routes to Albany, New York, were uninterrupted. Neither were rail shipments to the south which were transferred to barges for delivery to refineries.
Philadelphia Energy Solutions 330,000 barrels-per-day refinery, a joint venture between Carlyle Group and Sunoco, and Phillips 66’s 238,000 bpd plant in New Jersey had seen no affects on their contracts.
The MM&A train was headed for the 300,000 bpd refinery owned by Irving Oil in Saint John, New Brunswick, and that was where the biggest adjustment was taking place.
Irving was reported to be buying gasoline barges of 100,000 bpd each on the open market in the New York Harbor.
Canada’s other big eastern refinery, the 265,000 bpd facility in Quebec City owned by Valero Energy, had no difficulties from the outset. It continued to run very light sweet crude from the Eagle Ford in South Texas and to import crude from outside North America.
—Gary Park
