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Collateral Damage: Saudi Disruption Leaves Canada's Biggest Refinery Vulnerable

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Canada may hold the world’s third-largest crude reserves, but that’s little help to its largest refinery after a weekend attack disrupted production in Saudi Arabia, its biggest oil supplier. Nearly all of the kingdom’s oil shipments to Canada travel to New Brunswick, home to a single refinery, Irving Oil Ltd.’s Saint John plant, which can process about 299,000 barrels a day. The refinery relied on Saudi crude for more than 40% of its supplies in July, Statistics Canada data show. The bulk of Canada’s reserves are located in the oil-sands region of Northern Alberta, in the west of the country. Most of that oil is exported to the U.S. and while some can be shipped to eastern Canada on Enbridge Inc.’s Line 9, the pipeline only serves refineries as far east as Montreal. Now, Irving may have to pay up for its crude....

https://www.bloomberg.com/news/articles/2019-09-16/saudi-oil-disruption-leaves-canada-s-biggest-refinery-vulnerable?utm_content=business&cmpid=socialflow-twitter-business&utm_campaign=socialflow-organic&utm_medium=social&utm_source=twitter

 

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Irving can obtain feedstock from the US via rail...

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So, their daily production is cut by 20%, after the attack on Saudi oil... Time for the pipeline in Eastern Canada...

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4 minutes ago, damirUSBiH said:

image.png.c1dd975a4aaeb60529fa85982bb9038a.png

The irony...Energy independent... literally some of the largest oil reserves on Earth and Canada buys oil from the Middle East...

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They also cut the 350kbbl/day pipeline from Abquiq to Bahrain so there is another refinery with supply issues.  In addition, because much of their NG production was lost, they are not able to run all their own refineries.  There will be shortages of refined product I am sure.  These SPR facilities are likely not to be worth much because they are not designed to timely deliver supplies, they are a one time shot.  Then the quality of the oil in the US one is suspect.  

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2 hours ago, ThunderBlade said:

The irony...Energy independent... literally some of the largest oil reserves on Earth and Canada buys oil from the Middle East...

Too stupid to allow a pipeline to go through. Maybe Jan can explain why it is too hard though. Maybe not cost efficient. 

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@Jan van Eck  ,  sounds like you're up again buddy  ;) 

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(edited)

5 hours ago, joze44 said:

Irving can obtain feedstock from the US via rail...

Didn't this already result in the Lac-Megantic rail disaster?  There is a lot of crude oil being produced offshore in the Canadian Atlantic continental shelf off of Newfoundland and Nova Scotia. Atlantic Canada has a thriving offshore oil and natural gas industry, with six producing projects and ongoing exploration activity in the area. Atlantic Canada produces more than 233,000 barrels of oil per day, representing five per cent of Canada's total crude oil production.  

Edited by canadas canadas
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3 hours ago, canadas canadas said:

Didn't this already result in the Lac-Megantic rail disaster? 

Yes.  That railroad (originally built by the Canadian Pacific  ["CP"] )  was sold to private interests and ran from Montreal into a junction at a little town in Maine  (Jackman), and then via a continuation to the Irving-owner rail line from the New Brunswick border to the refinery which, together with the port and shipyard, so dominates the port of St. John  (again, not to be confused with the farthest East Canadian port of St. Johns  (note the "s"), in Newfoundland.  This short-cut line mostly hauled timber and wood products, until the CN mainline that runs up and around Maine on only Canadian trackage trough the Gaspe got clogged and oil trains could not be accommodated.  So the oil trains would run from the Bakken fields in North Dakota apparently over the CP trackage to the big CP rail yards in Montreal, there to get handed off to the CN.It turns you that when the CN had limited capacity the freight was then handed off to the MMA, that spur-line company  (Montreal, Maine and Atlantic).  There was a crew switch arrangement on the hill outside Lac Megantic which is where one unit train was left unattended and it tolled away, plowing into downtown and incinerating the place (with 47 dead).  The explosive nature of the cargo suggests that the crude had volatiles such as propane dissolved into the light crude, which the shipper had not separated prior to loading. 

Irving Oil bought that crude because itwas cheaper than their usual ME Saudi stuff.  After the train wreck the Bakken oil was shipped to an engine-change point in Niagara Falls, NY, where CSX  (Chessie System) took it over and ran it along the Mohawk River route into the Port of Albany, NY, there to be trans-loaded onto oil tankers of the 60,000 ton class.  The tankers then took the loads down the Hudson River and up around Cape Cod and the Gulf of Maine into Irving. 

Irving went back to buying crude from the Saudis when the Saudis did a little local price war to buy their customer back.  I think Irving still buys Bakken crude on the spot market (they could have some longer contracts, I don't have good intelligence on that).   Whatever they would buy, would come via the Port of Albany.  The CP no longer runs rail service past Montreal and the CN has stopped one main line into the Maritimes due to track overhaul costs, so it is left with but one line and that is heavily booked.  Oil is not a priority cargo so the water route is typically used for everything, both Bakken crude and ME stuff. 

Irving sells extensively into Northern New England, especially in the heating-fuel market  (#2 oil), and also totally dominates the retail business in the Maritime Provinces.  The Irving family are the billionaires there; they also control most of the timber lands in New Brunswick, and thus are the source of dimensional home-construction lumber in New England.  However, that market is in collapse as people are abandoning New England,due to out-of-control taxes, State budget deficits, and unpayable debts threatening defaults and bankruptcies on the New England States (and New York State).  Irving Oil is now getting burned by the Saudi supply disruption.  Couldn't happen to a nicer bunch of guys;  Irving is notorious for cutthroat business practices.  (P.S.  I personally loathe the people of the Irving Oil business.)

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Ladies and gentlemen, Jan is back

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5 hours ago, ronwagn said:

Too stupid to allow a pipeline to go through. Maybe Jan can explain why it is too hard though. Maybe not cost efficient. 

 

5 hours ago, DayTrader said:

@Jan van Eck  ,  sounds like you're up again buddy  ;) 

It is all politics, nothing to do with rational thinking.  There is this deep antipathy towards Alberta in the East, specifically in Ontario and Quebec.  Ontario takes in quite a bit of refined product from the US refineries in the US Midwest.  Quebec refineries (a good number of which have closed due to environmental activist pressures in the east End of the Island of Montreal) take in their crude via a pipeline running from Portland, Maine to Montreal.  That crude in turn is sourced typically either from the Caribbean or from the Middle East.  So the Quebec politicians think they can be pompous asses towards "the blue-eyed sheiks of Alberta" and be comfortable with cheap ME crude.  That idea just now has come to a crashing halt. 

It is pure stupidity, sheer arrogance and stupidity, on the part of the Eastern politicians that has kept overland pipe from Alberta for both oil and nat gas to flow to the population centers in Eastern Canada.  The country is open and notorious for political vacuousness and stupidity, so this particular expression of incoherence is nothing new.  And the result is that Albertans are now taking it on the chin, as they have no larger-scale access to markets.  It is my view that Alberta could and should invest heavily in refining capacity and then dominate the oil industry, including that in the US central North Midwest, with finished product.  But, they have also not done that!   Go figure. 

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3 hours ago, DayTrader said:

Ladies and gentlemen, Jan is back

Not really.  I am resigning from Oilprice.  

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Okay, time to conduct a poll: The question is, ‘How does Jan know so much, about so much?:

A). He’s a really smart Dutch transplant who apparently reads alot while eating ‘buttloads’ of Edom cheese to improve his retention.

B). He really doesn’t know squat but his responses are so detailed that the rest of us are too lazy to check out his responses and call him on it.

C). He’s actually not Dutch but is a Haitian voodoo priest that ‘rolls the bones’ and gets his answers from a ouija board.

D). Other possibilities (write ins).

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22 minutes ago, Douglas Buckland said:

Okay, time to conduct a poll: The question is, ‘How does Jan know so much, about so much?:

A). He’s a really smart Dutch transplant who apparently reads alot while eating ‘buttloads’ of Edom cheese to improve his retention.

B). He really doesn’t know squat but his responses are so detailed that the rest of us are too lazy to check out his responses and call him on it.

C). He’s actually not Dutch but is a Haitian voodoo priest that ‘rolls the bones’ and gets his answers from a ouija board.

D). Other possibilities (write ins).

As to (A):  No chance.  It is Edam, not Edom.  Edam is the best cheese on the planet, and it improves your virility to boot!

As to (B):   Definitely!   You guys are all way too lazy to check it out, so I can pontificate to the end of time. 

As to (C):   You are getting seriously close.  Do you have contacts inside the Men in Black?

(D):    I entered the USA via Area 51, was beamed down by Scotty, and those guys at 51 are so totally paranoid they refused to stamp my Martian Diplomatic Passport!  So I am an "illegal," No tienen papeles." "Me gusta Edam solomente, por favor."   Something like that. 

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8 minutes ago, Jan van Eck said:

As to (A):  No chance.  It is Edam, not Edom.  Edam is the best cheese on the planet, and it improves your virility to boot!

As to (B):   Definitely!   You guys are all way too lazy to check it out, so I can pontificate to the end of time. 

As to (C):   You are getting seriously close.  Do you have contacts inside the Men in Black?

(D):    I entered the USA via Area 51, was beamed down by Scotty, and those guys at 51 are so totally paranoid they refused to stamp my Martian Diplomatic Passport!  So I am an "illegal," No tienen papeles." "Me gusta Edam solomente, por favor."   Something like that. 

I knew it had to be something like that!

Since when do Martian diplomates speak really crappy Spanish?

James, Day Trader, you useless reprobates need to get in on this slagging! Be careful, Tom is watching....😂

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1 minute ago, Douglas Buckland said:

Since when do Martian diplomates speak really crappy Spanish?

We listen in on a satellite dish, beamed from Earth, some station from outside Phoenix, I think.  At least it gets us the basics! 

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Hiess the giys in Area51 didn’t speak Martian. You could probably converse with James. Being Scottish and living in Brazil nobody can understand him either..

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Damn just saw what I posted....maybe I can speak Martian after all!

Translation: Guess the guys in Area 51.....

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(edited)

7 minutes ago, Douglas Buckland said:

Hiess the giys in Area51 didn’t speak Martian. You could probably converse with James. Being Scottish and living in Brazil nobody can understand him either..

Ja, dass hasst Du ausgezeichnet gemacht!  Und der Englaendern - unverstandbar!

Edited by Jan van Eck

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Gesundheit!!! Hope you get to feeling better...

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I say B.

But A plays a small part. 

image.jpeg.b42d00fb0bbd67339ff9a6c80a56471d.jpeg

I still say it's flavourless plastic. 

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6 minutes ago, DayTrader said:

I still say it's flavourless plastic. 

Sounds like a serious lament of sour grapes to me!  Note to readers:  The Dutch get this from the envious non-Dutch.  Oh, well. 

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7 hours ago, Jan van Eck said:

Not really.  I am resigning from Oilprice.  

I will act as the flame to Jan the Moth.

 

670880579_JANwoman.png.ffaa89c841013ee8f2c48044e8582a34.png

 

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1 minute ago, DayTrader said:

I will act as the flame

You really need to start dating another group of women!

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