Suncor crude tanker to resume journey from Quebec to Gulf Coast

Fri Oct 17, 2014 4:35pm EDT
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By Nia Williams

CALGARY, Alberta Oct 17 (Reuters) - A tanker chartered by Canada's Suncor Energy Inc to ship oil sands crude from Quebec to the U.S. Gulf Coast was expected to receive replacement parts on Friday, enabling it to resume its journey, a Transport Canada spokeswoman said.

The aframax tanker Genmar Daphne will be the second tanker of Western Canadian heavy crude that Suncor has shipped from the port of Sorel-Tracy on Quebec's St. Lawrence river.

However, further shipments are unlikely in the current price environment, a market source said.

Shrinking differentials between Western Canada Select heavy blend and U.S. crude futures mean netbacks - the price received by producers minus the cost of getting the product to market - have been severely squeezed.

The Genmar Daphne has been anchored in the St. Lawrence river for several days after the ship's crew reported the failure of an emergency fire pump to Transport Canada.

"Once the repairs have been made and the Genmar Daphne meets the regulatory requirements, the vessel will be authorized to resume its journey," said Transport Canada spokeswoman Josianne Martel.

From Sorel-Tracy the Genmar Daphne is scheduled to deliver its cargo to the U.S. Gulf Coast, according to Reuters shipping data. The Gulf Coast, where Western Canada Select (WCS) heavy blend competes with Maya, a Mexican blend of similar quality, is North America's largest refining centre.

It is a costly journey given shipping crude by rail from Alberta to Quebec costs roughly $11-$12 per barrel, and shipping from East Coast Canada to the Gulf Coast on a tanker is about $2 per barrel. The same journey costs around $8 by pipeline.   Continued...