Arab Today, arab today china set for canadian oil after us delays pipeline
Last Updated : GMT 00:00:20
Arab Today, arab today
Arab Today, arab today

China set for Canadian oil after US delays pipeline

Arab Today, arab today

Arab Today, arab today China set for Canadian oil after US delays pipeline

Beijing - Arabstoday

China is set to embrace Canada\'s offer of more crude, heating up competition with the US as the world\'s top two oil consumers jostle to secure supplies and meet ravenous demand. Shipments from a politically stable country such as Canada will be a welcome diversification of supply sources as top consumers make plans to deal with a supply shock if tensions in the Middle East escalate and choke off Iranian exports, barely a year after markets coped with a disruption from Libya. Canada\'s plan to ship crude to Asia got a boost after Prime Minister Stephen Harper said his nation would step up efforts to supply the region after the US delayed a decision on a pipeline supply link. \"A Canadian source could offer a diversity of supply attractive particularly to North Asia,\" said John Vautrain, director at consultancy Purvin & Gertz. \"Canada is a stable country, not subjected to geopolitics, and the crude would be valued in the market to make it competitive.\" Canada\'s oil sands output is expected to double by the end of this decade from 1.5 million barrels per day (bpd) now, according to IHS Cera, close to Libya\'s exports before a civil war disrupted output this year. China is an ideal client for Canada in Asia as it has the ability to process a wide range of crude and its appetite continues to grow. The Canadian heavy sour grade, which will be shipped to Asia, has API gravity of 19-22 degrees and contains around 3 per cent sulphur. Most Asian refineries process crude of 30 degrees API. \"There is no oil that we can\'t process,\" an official at Sinopec, said, declining to be identified as he is not authorised to talk to the media. \"With 30 refineries, there will be some that can use Canadian crude.\" China, eager to secure extra energy supplies to power its rapidly growing economy, is already buying more Canadian crude. Increased supply Canadian crude exports to the Asian nation rose more than 60 per cent this year after the arbitrage window opened on low freight rates and deep spot discounts and a depressed West Texas Intermediate marker. But that still makes up less than 0.3 per cent of its total purchases. The top three Chinese oil companies PetroChina, Sinopec and China National Offshore Oil Corp (CNOOC) own equity stakes in oil sands fields, while Sinopec is one of the backers of the Northern Gateway project that would carry Canadian crude to the west coast for loading on tankers. Regardless of how much crude Canada has to sell, other Asian buyers in the Pacific — South Korea and Japan — may not be so keen to take more because the crude has API gravity below 20, which makes it one of the heaviest, or of lowest quality. \"The refining capacity is being expanded and with more supply issues, they can take the crude if it is at their doorstep,\" said Kang Wu, senior adviser at FACTS Global Energy. \"But that\'s a big if.\" The low quality means other Asian buyers will have to blend with better crudes and reduce the sulphur content before processing, cutting into profits from processing each barrel. Or refiners have to build so-called secondary units that are capable of producing cleaner-burning fuels from low quality oil. \"Upgrading means you have to add a new unit and you have to retire some other units. That\'s a tough choice that involves millions and billions of dollars of investment,\" Wu said. \"Asia is building refineries, so they need more crude. But unfortunately everybody is doing the same thing, designing their refineries based on light-medium crude or even heavy, although not as heavy as Canadian,\" Wu said. A South Korean refiner said he hadn\'t looked at the economics of processing Canadian crude while another said logistics and operations were major hurdles. Good replacement \"It\'s not going to be a good replacement, compared with the Middle East, because of operational issues,\" the official said. It would also be difficult for Asian refiners to plan ahead as they buy most of their crude two months forward while Canadian grades are sold just one month before, he said. \"If trading houses bring it out to Asia, then we can start talking,\" he said. Even though Japan\'s JX Holdings holds a small stake in Syncrude Canada, it generally doesn\'t make economic sense for the company to bring the crude back to process, a company spokesman said. Apart from China, India is the only country that could feasibly take large Canadian volumes as it has refineries designed to process such crudes. Infrastructure could limit supplies Even if Canadian Prime Minister Stephen Harper wants to increase sales to Asia, supplies will be limited by infrastructure hurdles. As the fastest-growing non-Opec producer, Canada urgently needs more pipeline and rail capacity, to expand a terminal at Vancouver and add storage tanks to move more of the landlocked oil to the west. The existing Trans-Mountain pipeline linking Alberta to the Pacific Coast for exports to Asia only has the capacity to transport 300,000 bpd. The pipeline\'s operator, Kinder Morgan Energy Partners LP, may expand its capacity by a few hundred thousand barrels a day by 2015, while Enbridge Inc plans to build a new multi-billion dollar Northern Gateway pipeline. Canada will get the pipelines and ports in place, much as Russia did by diverting Siberian crude to Asia, but it may take at least 10 years before the facilities are fully up and running, analysts said.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today china set for canadian oil after us delays pipeline Arab Today, arab today china set for canadian oil after us delays pipeline

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today china set for canadian oil after us delays pipeline Arab Today, arab today china set for canadian oil after us delays pipeline

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today O'Leary: Could ground more planes

GMT 06:49 2017 Friday ,22 September

O'Leary: Could ground more planes
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Huthis stage defiant rally 3 years

GMT 05:29 2017 Friday ,22 September

Huthis stage defiant rally 3 years
Arab Today, arab today Saudi Arabia to unblock internet calling apps

GMT 11:31 2017 Wednesday ,20 September

Saudi Arabia to unblock internet calling apps
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Ministry seeks to improve education

GMT 14:49 2017 Sunday ,17 September

Ministry seeks to improve education
Arab Today, arab today All eyes on May as she prepares

GMT 10:16 2017 Friday ,22 September

All eyes on May as she prepares
Arab Today, arab today Puerto Rico, Virgin Islands brace

GMT 12:01 2017 Wednesday ,20 September

Puerto Rico, Virgin Islands brace
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes pumps 1 bln euros    

GMT 06:04 2017 Friday ,22 September

Mercedes pumps 1 bln euros    
Arab Today, arab today Intel chips loaded in Waymo

GMT 14:43 2017 Wednesday ,20 September

Intel chips loaded in Waymo
Arab Today, arab today Youssra prepares for launching her  program

GMT 08:59 2017 Wednesday ,20 September

Youssra prepares for launching her program
Arab Today, arab today France hopeful of persuading Trump

GMT 06:21 2017 Wednesday ,20 September

France hopeful of persuading Trump

GMT 09:40 2017 Tuesday ,19 September

Actress Ream Hhagag prepares for a new film

GMT 18:09 2017 Thursday ,21 September

China lifts 10-year travel ban

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 19:18 2017 Monday ,18 September

5,000 'Dieselgate' deaths in Europe per year

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 18:03 2017 Thursday ,21 September

Alarm over flesh-eating ulcer cases

GMT 07:00 2017 Wednesday ,20 September

A no-frills business success

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 12:46 2017 Thursday ,21 September

Google likely to buy stake in Taiwan smartphone maker HTC

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday