Boston, MA 05/07/2014 (wallstreetpr) – Suncor Energy Inc. (USA) (NYSE:SU) is preparing to utilize only North American crude in eastern Canada by the year 2015 so as to completely displace overseas imports. The company said that its Montreal refinery will be able to generate the required crude by 2015. Since Novemeber, the crude imports from outside North America to Ontario, Quebec and Atlantic have fallen by more than 50% as compared to the previous year. At the same time, Enbridge Inc. is also planning to start a pipeline by the end of the year, which will allow the crude to flow from North Dakota and Alberta fields to Montreal. Once in place, the pipeline will further reduce the high-priced imports from Europe and Africa.
Soaring Inventories In the U.S.
The crude production in the U.S. scaled to a record level of 26-year high in April, resulting in increased stockpiles in the region. The inventories swelled to nearly 400 million barrels, which is the highest since 1931. Therefore, export of crude oil to eastern Canada, along with increasing future potential of exports, could help ease off the situation and would also help bring domestic prices in line with the international levels, as per Tom Finlon, Director of Energy Analytics Group Ltd.
As per Canada’s National Energy Board, the Canadian refineries situated in Ontario, Quebec and along the Atlantic Coastal region imported nearly 586,838 barrels per day in Novemeber as against 854,784 in the previous year.
Canadian Refineries At Advantage
Since the Canadian refineries have some advantage to import crude oil by ship, rail and pipeline, therefore, it adds sense for them to get 100% import from North America, according to Robert Campbell, who is an oil products research head at Energy Aspects Ltd. Suncor Energy Inc. (USA) (NYSE:SU)’s CEO, Steve Williams said that the company shipped nearly 20,000 barrels a day of inland crude by rail, during the first quarter, to Montreal, which helped it save $10 per barrel on those supplies.