By ALISON SIDER
Valero Energy will begin exporting crude oil from Texas to
its refinery in Quebec this
summer, CEO Bill Klesse told analysts at a conference last
"It's flooding the Gulf coast," Mr. Klesse said of light,
sweet crude produced at shale formations in the US. Though the
infrastructure to transport that crude to coastal refineries
has lagged, Mr. Klesse said pipelines are coming online and
rail is closing the gap in the mean time.
"So what are we going to do? We're going to take some to
Quebec. We already got our license to do that," he said. Mr.
Klesse said the company's one-year license will allow it to
send 90,000 bpd of crude to Canada.
Under US regulations, a company can obtain a license to
export crude oil to Canada for use in that country.
Mr. Klesse said Valero is also making adjustments to its
Gulf Coast refineries to allow them to process more light sweet
crude, and pushing out medium sour crudes such as those
produced in Brazil and the Middle East.
"A couple years ago I never would have said that in one of
these meetings, because we wanted to be known as a heavy oil
refiner," he said.
Valero spokesman Bill Day wouldn't say how much Texas crude
the company will ultimately send to Canada, citing competitive
reasons -- the company will still need to buy crude from other
sources to meet the 265,000 bpd Quebec refinery's needs. Deliveries are
expected to begin this summer.
Mr. Day said this will be Valero's first effort to export
crude to Canada. The permit Valero has received allows it to
send crude to Canada for one year, but Mr. Day said this could
be the beginning of a longer-term venture for the company.
"Assuming this works out the way we expect it to
economically, we would foresee renewing the permit," he
Dow Jones Newswires