Strathcona Pitches 250,000-Bpd Oil Export Route to Asia
Canadian oil producer Strathcona Resources wants to export up to 250,000 barrels per day of crude from British Columbia's northern coast using rail shipments and a new marine terminal to reach Asian markets. But first, it needs Ottawa to make an exception to its oil tanker ban.
Strathcona Chairman Adam Waterous told Bloomberg that the company plans to approach Prime Minister Mark Carney's government as early as next week with a proposal to move crude by rail to a new export terminal in Prince Rupert.
Waterous believes exports could begin within two years, considerably sooner than Canada's proposed new oil pipeline to the Pacific coast, which isn't expected to operate until the early to mid-2030s.
Canada currently sends roughly 90% of its oil exports to the United States, a dependency Carney has been looking to reduce amid trade tensions with Washington.
There is, however, the matter of a federal law.
Former Prime Minister Justin Trudeau's 2019 Oil Tanker Moratorium Act prohibits tankers carrying more than 12,500 metric tons of crude or persistent oil from loading or unloading along British Columbia's northern coast.
Carney reaffirmed his commitment to that ban in July, complicating Alberta's efforts to develop a 1-million-bpd pipeline to the coast.
Strathcona's proposal would avoid the need for a new cross-province pipeline, but not the tanker restrictions.
Waterous argues Prince Rupert already has much of the necessary infrastructure because the port handles propane shipments arriving by rail. Strathcona also has experience moving crude by train, shipping up to 80,000 bpd to the U.S. Gulf Coast through terminals in Alberta and Saskatchewan.
The political obstacles remain substantial. B.C. Premier David Eby, environmental groups, and numerous coastal Indigenous communities oppose lifting the ban. Waterous hopes partnerships with Indigenous communities could help advance the project.
If approved, the proposed 250,000-bpd terminal would increase Canada's existing crude export volumes from British Columbia's coast by nearly 50%.
For now, the proposal offers a faster route to Asian markets, provided Ottawa is willing to reopen a tanker debate it appeared to have settled just three months ago.
By Julianne Geiger for Oilprice.com
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