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Canada ships its first tanker of heavy crude to Europe from a Canadian port

Canada ships its first tanker of heavy crude to Europe from a Canadian port

Bloomberg reported yesterday that Suncor successfully loaded approximately 700,000 barrels of Western Canada Select crude oil onto a tanker destined for shipment to the Mediterranean Sea. The crude oil was shipped by rail from Alberta to a Kildair storage terminal in Sorel-Tracey, about 50 km north of Montreal.

The Aframax tanker Minerva Gloria was spotted leaving the port of Sorel-Tracey yesterday. The Minerva Gloria is an Athens-based double-hulled crude oil tanker built in 2009. The ship is approximately 250 m long and has an estimated capacity of 600,000 to 700,000 barrels. Sources close to Bloomberg claim the shipment is destined for Sarroch, Sardinia (Italy), most likely to the Saras refinery which is capable of processing heavy sour feedstock. However, this information was not confirmed by Suncor.

Suncor regularly ships crude by rail from Alberta to its Montreal-East refinery. The company recently completed construction of a rail-loadng terminal in Montreal which has a loading capacity of 36,000 barrels per day. Coincidentally, the Montreal-East refinery, which has a refining capacity of 137,000 barrels/day, began an 11-week maintenance turnaround. It is unknown if this is a one-time shipment for performance testing or a more permanent arrangement. 

Bloomberg is also reporting that another similarly-sized tanker, the Texas-based Stealth Skyros, is presently en route to Quebec for loading of another Canadian crude oil shipment to the US Gulf Coast. 

An estimated 500 million barrels of petroleum and petroleum products are shipped in and out of the East Coast every year, about 160 million through various Quebec ports via the Gulf of St. Lawrence. This is approximately 16 times the volume seen on the West Coast where there is far more resistance to crude oil tankers.

Earlier this spring, Suncor shipped a cargo-load of Canadian heavy crude from a US port to a Repsol refinery in Spain, likely for performance testing. Canadian crude is heavier than the North Sea Brent crude oil more commonly used as feedstock in European refineries. Shipments out of the St. Lawrence seaway are expected to increased once the Enbridge Line 9B pipeline is fully operational. European refiners are looking towards North America for a less-expensive alternative to Brent which is currently trading at a $20/barrel premium to Western Canada Select. Although Western Canada Select is regularly shipped to Europe from US Gulf Coast, this is the first major shipment of Canadian crude through a Canadian port.

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