Energy East, Line 9 pipelines would be boost for Quebec refinery sector: Suncor
Jeff Lewis | 12/11/13
CALGARY – Rival plans to pipe Alberta crude east would safeguard jobs and encourage investment in Quebec’s struggling refinery sector, the president and chief executive of Suncor Energy Inc. said Tuesday.
Steve Williams said TransCanada Corp.’s proposed Energy East pipeline and Enbridge Inc.’s Line 9 reversal and expansion would improve the profitability of Suncor’s 137,000-barrel-per-day Montreal refinery, securing a “long-term” future for the plant in a region that has witnessed several closures.
“The way I would look at it is to look backwards and say five or six refineries have shut down in the Montreal area because they haven’t been economic,” Mr. Williams said following a Calgary business luncheon attended by members of Montreal’s Board of Trade. Quebec refineries, including another run by Valero Energy Corp., are now captive to pricier imported oil.
“So it’s a tough environment for refineries [that] can only import international crudes to be able to make the economics of the refineries work, so [the pipelines] certainly increases the profitability and makes it a much better place to operate,” Mr. Williams said.
Canada’s oil industry is trying to woo Quebec as export ambitions to the West Coast and south to the United States Gulf Coast have stalled. But the path east remains fraught with opposition. This year, federal regulators cancelled final hearings into Line 9 in Toronto amid security concerns, forcing Enbridge to submit final arguments in writing.
In prepared remarks, Mr. Williams cited figures from the government- and industry-funded Canadian Energy Research Institute saying Quebec stands to gain $14-billion from new oil sands development over 25 years.
Michel Leblanc, president and chief executive of Montreal Board of Trade, said public support for pipelines hinges on investment in the province’s ailing petrochemical and refining industries.
“There has to be an understanding that Quebec will not just be a platform for exporting oil, that it will be a place where economic activity will happen, and I think that’s important for public support,” he told reporters.
A final decision on Line 9 is expected early next year from Canada’s National Energy Board. Enbridge wants to switch the flow and boost capacity on the 1970s-era conduit between Sarnia, Ont., and Montreal to 300,000 barrels a day.
Suncor, Canada’s largest energy company, is also backing TransCanada’s Energy East, which would funnel up to 1.1 million barrels a day of Western oil to export points in Quebec City and Saint John, N.B.
The projects could spur “a whole sequence of investments” including the potential addition of a coker at Suncor’s Montreal refinery, Mr. Williams said without providing specifics.
TransCanada has yet to formally apply for Energy East, but the project is due to start delivering Western crude to Quebec in 2017, when Suncor expects first oil from its $13.5-billion Fort Hills mine.
http://business.financialpost.com/2013/11/12/energy-east-line-9-pipeline...
