Maine pipeline eyes plan to ship Canada oil sands crude

Wed May 22, 2013 1:12pm EDT
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* Maine pipeline plan hinges on flows to Montreal

* Recent spills inflame Canadian oil debate

* Towns oppose oil sands, line passes through tourist zone

By Dave Sherwood

SOUTH PORTLAND, Maine, May 22 (Reuters) - The little-known operator of a pipeline linking Montreal and Maine is studying how to make the line the first route to get Canadian oil sands crude to an Atlantic deepwater port, but the plan relies on supplies that may not be available for years.

The Portland-Montreal pipeline - principally owned by top Canadian oil refiners Suncor Energy Inc, Imperial Oil Ltd, and Royal Dutch Shell Plc - has already spent about $6.5 million to prepare for a reversal of the line so it can carry heavy oil sands crude from Quebec to Maine's biggest city, according to regulatory filings from 2011. The pipeline now mainly carries imported crude to Canadian refineries.

The plan to reverse the 236-mile (378-kilometer) duct has already made New England green groups and some lawmakers bristle, opening up an eastern front in the national energy and climate change debate. But its fate may hang more heavily on the availability of oil sands crude from points west than it does on local support.

"This is not something that's going to happen overnight," said Larry Wilson, chief executive of the Maine-based Portland Pipe Line Corp, citing the need for enough supply reaching Montreal and demand along the Eastern Seaboard.

"But we are currently operating under capacity, and looking for every opportunity to maximize use of our assets, including reversal," he said of the pipe, which was designed to move as much as 240,000 barrels per day.   Continued...