UPDATE 1-Suncor to regularly consider shipping Western Canada crude overseas

Thu Oct 30, 2014 11:52am EDT
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(Adds details on crude shipments, quote)

By Nia Williams

CALGARY, Alberta Oct 30 (Reuters) - Suncor Energy Inc will look regularly at the economics of shipping Western Canadian crude from the country's East Coast to markets overseas, Chief Executive Officer Steve Williams said on Thursday.

In a third-quarter conference call, Williams said shipping Cold Lake-grade crude by rail from Alberta to the East Coast and from there transporting it overseas could be a long-term opportunity for the company, with Europe and the U.S. East and Gulf Coasts as possible markets.

For years oil producers in landlocked Alberta have been seeking ways to get their crude to tidewater and higher-priced international markets.

Last month Suncor sent its first ever tanker of Western Canadian crude from Canada's East Coast to Europe and earlier this month it also sent a tanker to the U.S. Gulf Coast.

In both instances the crude was shipped across the country by rail to the port of Sorel-Tracy, Quebec, on the St. Lawrence River, where it was loaded onto tankers.

A source at Suncor said the deals were made several months ago, when the economics of transporting crude to markets via rail and tanker made more sense.

Since then price differentials between Western Canadian crude and international benchmark grades have narrowed, making the economics of the journey less attractive.   Continued...