Alberta government makes move on shipping crude to Eastern Canada
Calgary (Platts)--23Nov2012/536 pm EST/2236 GMT
The Alberta government has taken the first step toward finding a footing
for its growing bitumen production in eastern Canada, with the establishment
of a working group with the Quebec provincial government, an Alberta
government official said Friday.
The group will focus on issues related to technology and environment in
the development and transport of natural resources. Details on the group's
composition and specific tasks would be unveiled in early 2013, Jay O'Neill,
a spokesman for the Alberta government, said from Edmonton.
The establishment of a working group came after Alberta's Premier Alison
Redford late Thursday met her Quebec counterpart, Pauline Marois, in Halifax
on the sidelines of the annual Council of Confederation meeting of the
premiers of all Canadian provinces and territories.
"This was the first time for me to sit down with Premier Marois and we
have an agreement to build bridges between the two provinces on the issue of
energy, economic growth and jobs," Redford told reporters during a webcast
conference call late Thursday.
"We have not concluded what the synergies could be over the long term.
But [in the shorter-term], but there is a very good opportunity to cooperate
and the working group will immediately begin sharing knowledge and expertise
on resources development, as well as key issues around oil pipelines."
Brushing aside a specific query if talks were held to ship Alberta crude
to refineries in Montreal, Redford said the working group is likely to be the
first move toward that path.
The setting up of a working group has raised some eyebrows in the
industry, particularly after a November 14 statement by Quebec's Environment
Minister, Daniel Breton, who said the province would block a pipeline to
transport Alberta crude to Quebec if it is found to pose a serious
"They cannot go over our heads because it is on our territory and we
have environmental reasons to make sure everything goes well," he said in
Quebec City. "If it does not go well, we cannot go ahead. But if it goes
well, we will go ahead. However, we will need to have all the information."
Sourcing crude from Alberta could result in a lower import bill for
Quebec's refineries, which are at present securing feedstock supplies from
more expensive international markets, Redford said.
"One thing provincial governments in Canada are thinking about now is to
work together on opportunity opportunities," Redford said. "A working group
will demonstrate that natural resources development can create jobs and sour
economic growth," she said.
Oil sands will still continue to be the major business in 2013 in
western Canada despite emerging tight oil plays in Saskatchewan and LNG in
British Columbia, but there is a risk of slow down unless the path to a new
market is opened up, said Chris Mackie, vice-president for business
development with Baker Hughes Canada.
"An oil pipeline to Eastern Canada could change the face of the industry
as it will allow producers to cut direct deals with refinery operators," he
At present, refineries in Ontario and Quebec import some 850,000 b/d of
crude oil primarily from the Middle East and Africa. But later this year
Enbridge is due to file an application to federal Canadian regulator National
Energy Board to reverse its 240,000 b/d Line 9B from Westover, Ontario, to
Montreal to serve refineries in Quebec, while TransCanada will soon start
gauging shipper interest to convert its underutilized natural gas main line
that runs east to transport crude.
--Ashok Dutta, email@example.com
--Edited by John Kingston, firstname.lastname@example.org