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Irving Oil to boost crude-by-rail output from Alberta to East Coast refineries

12.02.2013  | 

Irving Oil is boosting its ability to ship crude by rail from Alberta to the nation’s East Coast. The company is building infrastructure to load 40,000 bpd of heavy oil from Alberta onto trains in a new joint venture.

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By REBECCA PENTY

LAKE LOUISE (Bloomberg) -- Irving Oil is boosting its ability to ship crude by rail from Alberta to the nation’s East Coast, according to CEO Paul Browning. The company is building infrastructure to load 40,000 bpd of heavy oil from Alberta onto trains in a venture with Kinder Morgan Energy Partners and Keyera Corp., Browning said at a conference.

The company can already offload 145,000 bpd from rail cars at its refinery in Saint John, New Brunswick, and is using foreign-flagged vessels to import midcontinent crudes from the Gulf Coast, he said. That’s cheaper than sourcing global grades by ship and will also support plans by Irving to sell North American oil to markets as far as India, he said.

Saint John will become “one of the only ports in the world that’s connected by world-class rail and pipe and marine access to North American crude,” Browning said.

Irving is joining with TransCanada on a $282.8 million marine terminal in Saint John, part of a vision to export rising supplies of oil-sands bitumen via TransCanada’s proposed $11 billion Energy East pipeline from Alberta to the port city.

Refinery competitiveness

As Irving accesses cheaper oil supplies, it’s boosting its competitiveness as a refiner on the East Coast, a region where about 1.6 MMbpd of refining capacity has closed in recent years because of lower North American demand for fuels, Browning said. Irving accounts for 80 % of Canada’s exports of petroleum products and 20 % of United States imports, he said.

“Increasingly when you’re talking about East Coast refining, you’re talking about Irving Oil,” Browning said, adding the company’s Saint John refinery “may soon be the only refinery located north of New York City and east of Quebec City.”

The refinery has a capacity of 298,800 bpd, according to figures compiled by Bloomberg. The company’s largest supply of oil comes from Newfoundland and all its natural gas comes from Nova Scotia, Browning said.



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