Thursday, July 17, 2008

Canada is only energy self-sufficient on paper.....not in substance

$7 billion pipeline to go straight to Texas
TransCanada plans to extend its Keystone project to be completed by 2012


Lured by the immense refining capacity on the Gulf Coast, TransCanda Corp. plans to extend its massive Keystone pipeline to ship Canadian crude from Alberta's oilsands straight to Port Arthur in Texas.

The expansion, to be completed by 2012, is expected to cost $7 billion and will nearly double the pipeline's capacity from 590,000 barrels a day to approximately 1.1-million, the Calgary-based company announced yesterday.

Costs for the entire pipeline are estimated at about $12.2 billion.

Currently, only Exxon Mobil's Pegasus pipeline, which has a capacity of 66,000 barrels per day, pumps western Canadian crude to Texas.

"I gather TransCanada is celebrating today," said Steven Paget, an analyst with First Energy Capital Corp.

"Keep this in mind: They are not moving a single barrel right now. And to go from where they are now to this is quite and achievement."

The expansion was made possible after several shippers, whose names are protected by confidentiality agreements, committed to ship about 300,000 barrels a day to the Gulf coast for an average term of 18 years.

Oil giant ConocoPhillips, a partner in the Keystone pipeline project, is one of the shippers, a TransCanada spokeswomen confirmed, and Paget said he suspects Royal Dutch Shell to be another, given the latter's expansion plans for its Port Arthur refinery.

Most of Alberta's crude oil is being shipped to refineries in the U.S. midwest, an area with a total refining capacity of about 3.5-million barrels a day.

Thirst for Canadian crude on the Gulf coast, which boasts North America's largest refining capacity of about eight million barrels per day, however, is expected to grow more acute as supplies from Mexico and Venezuela, the area's largest suppliers, are fickle or dwindling.

"As we look at the growth of the oilsands going forward, we certainly need to look at alternative markets," said Greg Stringham, of the Canadian Association of Petroleum Producers, an industry lobby group.

"The desire to look at (the Gulf coast) is really coming from the size of that market and the quality of refineries in the market."

1 comment:

Dr Mike said...

Now we know why Sarnia in my area took the shaft & had it`s multi-billion dollar refinery project cancelled--Shell was to process the oil from the Oil sands at this facility.

Pump that oil directly to the US refineries & eliminate the middle man & all the economic benefits that come with it.

Who needed all those new high paying jobs anyway---leave us with all the pollution from extracting this oil but none of the benefit.

Way to go "New" Conservative gov`t.

We get screwed again.

You would thing we would be getting used to it by now.

Dr Mike Popovich.