Repsol move on Alberta oil to replace mexican and venezuelan crude
Canada shipping oil by train.
Company would use rail to move barrels to the Atlantic Coast
Repsol could get 500,000 barrels per month of oil sands crude
By Robert Tuttle, Lucia Kassai, and Rodrigo Orihuela / Bloomberg
Petroleumworld 11 13 2019
Repsol SA is looking as far away as Western Canada for oil for its European refineries amid dwindling supplies from Mexico and Venezuela.
The Spanish oil company is considering using rail to transport as much as half-a-million barrels of heavy crude a month 1,911 miles (3,075 kilometers) from Alberta to Montreal before loading it onto tankers bound for Europe, according to people familiar with the situation. The company has also considered shipping the crude to New Jersey for shipment to Europe.
The European company has typically sourced heavy crude supplies from Latin America, particularly Mexico and Venezuela. But U.S. sanctions, as well as civil strife, have crippled Venezuela's oil production, which has fallen to less than 700,000 barrels a day from more than 2 million four years ago. Mexico's oil production has fallen for 14 straight years to 1.83 million barrels a day in 2018. That's left Repsol looking for alternatives.
Repsol declined to comment in an email.
Repsol's European refineries hold about 25% of the continent's coking capacity, according to the company. Coking units allow refineries to process heavier crude, which is typically cheaper than lighter oil, into high-value fuels such as gasoline and diesel.
Alberta's landlocked status means it ships nearly all of its crude oil to the U.S. by pipeline or rail. The Trans Mountain pipeline to the Pacific Coast allows a tiny fraction to be shipped to Asia. The long distance to market has kept Canadian heavy crude selling for less than West Texas Intermediate futures. The discount was more than $20 a barrel on Monday.
Shipments of oil sands crude to Europe are rare. Repsol occasionally gets heavy Canadian crude via U.S. Gulf ports, where Canadian oil competes with U.S. crude for sea berths and space on pipelines.
About 400,000 barrels of Alberta crude were sent to the U.K. last year, the first significant shipment to Europe since 2014, when a tanker of Alberta crude left a terminal near Montreal for shipment to Italy, according to the Canadian International Merchandise Trade database .
Repsol produces conventional heavy crude in west-central Alberta at its Chauvin field.
Story by Robert Tuttle, Lucia Kassai, and Rodrigo Orihuela from Bloomberg.
bloomberg.com / 11 12 2019
We invite you to join us as a sponsor.Circulated Videos, Articles, Opinions and Reports which carry your name and brand are used to target Entrepreneurs through our site, promoting your organization’s services. The opportunity is to insert in our stories pages short attention-grabbing videos, or to publish your own feature stories.________________________
Copyright© 1999-2019 Petroleumworld or respective author or news agency. All rights reserved.
We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.
Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.
Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.Write to firstname.lastname@example.org
By using this link, you agree to allow PW
to publish your comments on our letters page.
Any question or suggestions,
please write to: email@example.com
Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels