Canada Looks To China, India For Energy Customers

According to the Canadian Association of Petroleum Producers, bitumen output from the Alberta oil sands is projected to double by 2022 to 3.8 million barrels per day. The problem with bitumen is that it’s too thick to flow freely on its own. It must be mixed with a super-light oil called condensate so that it can be shipped through pipelines. With growing oil sands production, condensate demand is poised to sky-rocket as well. Based on estimates provided by the Energy Resource Conservation Board, the demand for condensate in Alberta could double to 650,000 bpd within the next decade. Today, condensate is the most prized hydrocarbon in Alberta with the light oil trading for a 10% premium over West Texas Intermediate. Analysts fear shortages could result as imports struggle to keep up with demand. Yet south of the 49th parallel, the United States is facing a condensate glut. In the Texas Eagle Ford, condensate production accounts for as much as 30% of output.With forecasters projecting Eagle Ford production to exceed one million barrels per day by next year, much of that will be condensate. But here’s the problem. Nearby Gulf coast refineries aren’t well equipped to handle the super light oil bubbling out of the Texas shale. Over the last decade, refineries spent billions of dollars outfitting their plants to process heavy sour blends. Additionally, refining condensate isn’t profitable. The light oil doesn’t produce the higher value distillates used to make diesel or jet fuel. So with an unexpected surge in condensate production and low demand from refineries, you have a recipe for low prices. In general, Gulf coast refineries have been paying $15 per barrel less for condensate than light oil varieties. That’s great for downstream marketers.

Cutler,Guest blogger / October 4, 2013 Pipelines carrying steam to wellheads and heavy oil back to the processing plant line the roads and boreal forest at a project 74 miles south of Fort McMurray, Alberta, in Canada. Todd Korol/Reuters/File Enlarge Asian countries continue to line up for Canadian energy to which the United States is unable to commit. This week Japan ‘s prime minister Shinzo Abe met with his Canadian counterpart Stephen Harper to discuss the potential for shipping liquefied natural gas (LNG) across the Pacific Ocean to Japan. Although no firm agreement was announced, Japanese newspapers speculated that the first Canadian exports might reach Japan as early as 2018 and no later than 2020. OilPrice.com offers extensive coverage of all energy sectors from crude oil and natural gas to solar energy and environmental issues. To see more opinion pieces and news analysis that cover energy technology, finance and trading, geopolitics, and sector news, please visit Oilprice.com . Recent posts The Christian Science Monitor Weekly Digital Edition This reflects, among other things, the greater difficulty that Canada has had in developing LNG export terminals. Low prices for gas from western Canada is another problem, and although there is reason to believe in a secular rise towards higher prices, U.S. producers are less affected by the current levels. On the other hand, as prices rise, there are fears in Canada of a typical bust-to-boom scenario; and for this, there is fear that Canada’s gas producers are and will continue to be ill-prepared, not even able to take advantage of the anticipated boom. (Related article: Despite Shale, OPEC Still Matters ) RECOMMENDED: US energy in five maps (infographics) Nevertheless, India is also getting in line for Canadian oil as well as gas. India’s High Commissioner Nirmal Verma was also in Ottawa this week to sign a nuclear cooperation agreement allowing uranium from Canada to be sold to India as reactor fuel. India seeks to triple in electricity production in the next decade, in part by building as many as a dozen new reactors. Agreement was actually reached three years ago, but the additional time is required in order to establish a process for independent verification that the fuel is used for peaceful purposes. In 1974, India used a reactor supplied by Canada to create the fuel for a nuclear bomb test. India is even willing to consider investment in the Energy East Pipeline, even as TransCanada has had to delay its filing of an application to the National Energy Board from this year until next year. Environmental concerns that need to be addressed during the regulatory process are partly responsible for the delay, but also it is now foreseen that the original estimate of 850,000 barrels per day (bpd) is low and should be increased to 1.1 million bpd. (Related article: Canada to Drill for Offshore North Atlantic Oil ) Energy talks between the two countries were elevated to the ministerial level last year when our visit India, and India’s energy minister will be visiting Ottawa later this month to continue the discussions.

Canada set to strengthen cooperation in security and economic areas

The prime minister said he understood the potential for security cooperation during his visit to the Malaysian Maritime Enforcement Agency’s headquarters yesterday. We also witnessed the signing of commercial contract by OSI Maritime System Ltd with Malaysian Navy today, he said at a joint media conference with Malaysian Prime Minister Datuk Seri Najib Tun Razak after their bilateral talks here today. He also noted that on economic cooperation, bilateral trade and investment was growing well. There is tremendous upside potential in both areas, he added. Harper also pointed out that Malaysian companies were extremely well in Canada and likewise Canadian firms in Malaysia. Touching on Petronass 36 billion Canadian dollar liquefied natural gas project in Canada, he said the Petronas hefty investment had given a positive indication that the oil giant was looking for further investments with the Canadian government. “We are really excited about the possibility and we also had talks on the energy sector”, he added. Both leaders also witnessed the signing of a Memorandum of Understanding on the Declaration of Intent to Sign a New Agreement for Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income between Malaysia and Canada. Canadian Prime Minister Stephen Harper who is on a three day visit to Malaysia from Friday, was accorded a ceremonial welcome at the Perdana Square, here, earlier today. Harper was greeted upon arrival by Malaysian Prime Minister Datuk Seri Najib Tun Razak at 9.30am, before the national anthems of Malaysia and Canada were played. Harper then inspected a guard-of-honour mounted by 106 officers and men of the First Battalion of the Royal Malay Regiment. Also present to welcome Harper were Deputy Prime Minister Tan Sri Muhyiddin Yassin, Chief Secretary to the government Tan Sri Dr Ali Hamsa, and several cabinet ministers. The two leaders were then ushered to Level Five of the Perdana Putra building here to begin their bilateral meeting, where several memorandums of understanding are expected to be signed, followed by a joint press conference Story first published on: October 06, 2013 11:04 (MYT) Tags: Canadian Prime Minister, Stephen Harper, Najib Tun Razak Related Stories