Canada Suncor CEO sees 50:50 chance for US approval of Keystone XL

11 February 2014 17:32 Source:ICIS News

TORONTO (ICIS)--The controversial Keystone XL oil pipeline project from Alberta to the US has a 50:50 chance of obtaining final US government approval, the CEO of Canada-based oil, refining and petrochemicals major Suncor predicted on Tuesday.

Steve Williams, the CEO of Canada’s largest oil firm, added that Suncor, for its part, would not need the project to continue to be successful and grow.

The long-delayed 1,179-mile northern leg of TransCanada’s Keystone XL project, which crosses the Canada-US border, has yet to be approved by the US. The project’s southern leg from Cushing, Oklahoma to the US Gulf Coast is in operation.

"My best guess would be around 50:50" that Keystone XL gets approved, Williams said in an interview on Canadian business television.

"All of the science says that [Keystone] goes in, all of the economics says it should go in; it’s just a political issue, and that’s very difficult to predict," he said.

Williams also said the planned Northern Gateway pipeline to ship oil from Alberta to the British Columbia coast for export to Asia was a "tougher project" to predict than Keystone, as it involves land rights of Canadian native people.

In the near term, the most likely projects to get approved are the proposed reversal of an existing Canadian oil pipeline to flow from west to east to supply refineries in eastern Canada, as well as TransCanada’s proposed Energy East west-to-east pipeline.

Williams added that while Canada’s oil industry as a whole needed Keystone XL to help reduce the differential between global oil prices and discounted prices for Canadian oil, Suncor has an integrated strategy to grow without Keystone XL or other planned new pipelines.

"We may not take the margin in the [upstream] oil sands business, but we will take it in the refineries, in the gas stations," Williams said.

But he said that he would like to see Keystone XL and other projects to be built for the benefit of Canada’s overall oil industry.

By Stefan Baumgarten