CALGARY, Alberta (Reuters) - Irving Oil and TransCanada Corp (TRP.TO) said on Thursday they will build a $300 million marine terminal at Canaport in St. John, New Brunswick, to enable Canadian producers to export oil sands crude to world markets.
The joint venture was announced on the same day as TransCanada’s plan to build a 1.1 million barrel per day oil pipeline to ship Western Canadian crude to refiners on the East Coast and beyond.
“The Canaport Energy East Marine Terminal will connect TransCanada’s Energy East Pipeline to an ice-free, deep water port. It will allow Canadian producers direct access to world markets for exporting Canadian oil via the world’s largest crude carrying vessels,” said Paul Browning, President and CEO, Irving Oil.
The new pipeline and export terminal will give oil sands producers in landlocked Alberta, where heavy crude trades at a discount to the West Texas Intermediate benchmark, access to high-priced Atlantic markets for the first time.
Irving, which owns a 300,000 barrel per day refinery in St John and imports more than 100 million barrels of oil each year at Canaport, also said the Energy East pipeline would offer the refinery a broader supply of crude than it has today.
Engineering and design work on the project will start in 2015 and coincide with Energy East Pipeline project developments. The pipeline is expected to be in service for deliveries to New Brunswick by 2018.
The new export terminal opens up the possibility of more Canadian crude being exported to Europe. Producers started sending some shipments of light crude across the Atlantic earlier this year as the U.S. shale oil boom squeezed out U.S. East Coast demand for Canadian barrels.
Privately owned Irving said hundreds of jobs would be created during construction, and the terminal would employ up to 50 people in the long-term.
Reporting by Nia Williams; editing by Gunna Dickson