CERAWEEK-Canada could see oil glut -natural resources minister

Wed Mar 6, 2013 7:06pm EST
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* Canada's oil could back up without new pipeline infrastructure

* Natural resources minister promoting Keystone approval

By Kristen Hays

HOUSTON, March 6 (Reuters) - Canada's growing heavy crude output could turn into a glut, making the crude even cheaper than it is now, in the absence of new major pipeline capacity to move it to markets, the country's minister of natural resources said on Thursday.

"I'm definitely concerned about that," Joe Oliver told Reuters in an interview at the annual CERAWeek energy conference in Houston.

"We're looking at a potential bottleneck, certainly sometime this decade," he said. "It's looming."

Canada's support of such infrastructure fueled Oliver's appearance at the conference, which was part of a multi-day visit to the United States to press for U.S. government approval of the northern leg of TransCanada's Keystone XL pipeline after years of delays.

The pipeline needs approval from the U.S. State Department because it would cross an international border from Canada to the U.S. crude futures benchmark hub in Cushing, Oklahoma. Opponents contend it should be scrapped to ease spill concerns and possibly provide less incentive to continue the emissions-heavy operations.

A glut of inland U.S. crude at Cushing has kept U.S. crude prices cheaper than those for global crudes, though pipeline reversals and new projects are beginning to alleviate that.   Continued...