Canada west-to-east oil pipeline projects should help Montreal chems

04 September 2013 20:08  [Source: ICIS news]

TORONTO (ICIS)--Two planned west-to-east Canadian oil pipeline projects should benefit oil-based petrochemical producers in Quebec's Montreal region as the projects would, if realized, give chemical firms more feedstock options, an industry official said on Wednesday.

The projects would also improve margins for Quebec's two refineries which would be able to source oil priced on West Texas Intermediate (WTI), rather than Brent, David Podruzny, vice president of business and economics at trade group Chemistry Industry Association of Canada (CIAC), told ICIS.

“Anytime you can get greater energy diversity and price competition you are going to see people say that this is a good move,” he said.

Energy infrastructure firm
Enbridge has proposed to reverse the flow of an existing oil pipeline to go from the Sarnia petrochemicals production hub in southern Ontario eastward to Montreal. Meanwhile, TransCanada plans to build a west-to-east oil pipeline that will partially be based on converting existing natural gas pipeline capacity to oil.

Podruzny said that overall, Canada’s petrochemicals industry is predominantly based on gas and ethane, rather than oil and naphtha. As such, the west-to-east oil projects would not affect Sarnia where producers use ethane as their main feedstock.

"We have a very competitive gas-based petrochemicals industry in western Canada and in Sarnia which is competing against places like China, Japan and Europe, where producers are oil-based," he added.

Podruzny also said that Quebec’s chemical industry as a whole would benefit if that province’s government allowed the development of shale gas resources, as well as other oil resources. Quebec has imposed a moratorium on shale gas development.

By: Stefan Baumgarten
+1 713 525 2653

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