Alberta, Quebec to study rerouting Canadian crude eastward

Fri Nov 23, 2012 3:15pm EST
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By Richard Woodbury

HALIFAX, Nova Scotia (Reuters) - Alberta, Canada's oil-producing heartland, and Quebec's separatist government will study the benefits of shipping the western province's crude to refineries in Quebec, a shift that could help cut the industry's dependence on the U.S. market.

The development is a shift from previous comments by Quebec officials that had cast doubt on the energy industry's quickly evolving plans to get oil sands-derived crude to Eastern Canadian refineries, which now handle mostly imported oil that arrives at a much higher price.

Alberta Premier Alison Redford and her Quebec counterpart, Pauline Marois, agreed on Thursday to set up a working party to look at the issue ahead of a Marois visit to Alberta next year.

"It's exactly the evaluation we will do, to see if it's advantageous for both sides to have Albertan oil refined in Quebec," Marois said on Thursday evening on the sidelines of a meeting of Canada's provincial premiers.

Redford, along with New Brunswick Premier David Alward, want to send Albertan crude to the Irving Oil Ltd refinery at Saint John, New Brunswick, which would mean using pipelines through Quebec. The refinery, Canada's largest, has capacity of 300,000 barrels a day (bpd).

With Albertan crude production expanding rapidly, Redford has actively pushed for a national energy strategy to get Alberta oil to market through pipelines or other means.

Neighboring British Columbia has resisted a plan by Enbridge Inc for the C$6 billion ($6 billion) Northern Gateway pipe to the Pacific Coast, for export to Asia, and U.S. President Barack Obama has, temporarily at least, blocked TransCanada Corp's $5.3 billion Keystone XL pipeline to Texas refineries.

Greg Selinger, premier of the Prairie province of Manitoba, through which some crude already flows, praised the idea as a way to build energy security in Canada.   Continued...