US Valero to supply Quebec refinery with crude from Texas

13 March 2013 17:46  [Source: ICIS news]

TORONTO (ICIS)--US refining major Valero is planning to supply its 265,000 bbl/day refinery at Levis near Quebec City in Canada with crude oil brought in by ship from Texas, a company official said on Wednesday.

Valero spokesman Bill Day told ICIS that the company received permission from US authorities to export by ship up to 90,000 bbl/day of oil from Texas to its Quebec refinery.

The move comes as Valero's is seeking to replace a part of the expensive Brent-priced crude oil it currently imports to feed the Levis refinery, Day said.

In addition, Valero is interested in bringing in crude oil via pipeline from western Canada to Levis, Day said. However, there is currently no operating pipeline link to supply Quebec and other eastern Canadian provinces with oil from Alberta, he added.

“There is a lot of lower-cost North American crude that is becoming available, but the difficulty is working out the logistics to get it to the refineries,” Day said.

Day was commenting on a Canadian media report that said Valero could soon bring in a first shipment of crude from the Eagle Ford basin in Texas to Quebec.

Valero's Levis refinery processes sweet, high mercaptan crude oils and lower-quality, sweet acidic crude oils into conventional gasoline, low-sulphur diesel, jet fuel, heating oil and propane.

The refinery receives crude oil by ship at its deepwater dock on the St Lawrence River. The refinery transports its products through its own pipeline - commissioned in December 2012 - from Levis to a terminal in Montreal and to various other terminals throughout eastern Canada by trains, ships, truck and by third-party pipeline.

Valero's move to supply Levis with oil shipped in from Texas comes as Canadian oil industry and government officials keep lobbying US authorities and politicians in favour of the long-delayed Keystone XL pipeline - a 1,900km pipeline project that will enable supplies of Alberta’s oil to refineries on the Texas Gulf Coast.

US President Barack Obama last year deferred a final approval for Keystone XL, which met with resistance from environmentalists who fear the impact of emissions from Alberta’s heavy oil sands.

Meanwhile, in Canada, energy infrastructure firm Enbridge has applied for regulatory approval to reverse an existing oil pipeline that links the Sarnia petrochemicals hub in southern Ontario to Montreal to flow from west to east, instead of its current east-west flow. However, Enbridge’s proposal has met with resistance from environmentalists in Quebec.

April West Texas Intermediate (WTI) crude was priced at 92.73/bbl, up 19 cents/bbl on Wednesday, while Brent was priced at $109.64/bbl, down 1 cent/bbl, ICIS reported.

By: Stefan Baumgarten
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