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Old 11-25-2011, 03:19 PM
 
Location: Vancouver, B.C., Canada
11,155 posts, read 29,238,414 times
Reputation: 5479

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SINGAPORE/BEIJING (Reuters) - China is set to embrace Canada's offer of more crude, heating up competition with the United States 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 United States 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 percent sulphur. Most Asian refineries process crude of 30 degrees API.

"There is no oil that we can't process," an official at Sinopec, Asia's largest refiner, said, declining to be identified as he is not authorized 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.

Canadian crude exports to the Asian nation rose more than 60 percent 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 percent 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.
Source: Analysis: Harper's bet may pay off; China open to Canadian oil - *Money - MSN CA (http://money.ca.msn.com/investing/news/breaking-news/analysis-harpers-bet-may-pay-off-china-open-to-canadian-oil - broken link)
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Old 11-25-2011, 03:29 PM
 
Location: Vancouver, B.C., Canada
11,155 posts, read 29,238,414 times
Reputation: 5479
All this really says is that the ME is going to continue being a very Un-stable place and the oil flow out Souz Canal may start to slow down.. And that the delaying of the Keystone XL project from being built till after the 2012 Election is only going to make gas prices soar in the next year or so for both Canada and the US markets.
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Old 11-25-2011, 03:38 PM
 
4,019 posts, read 3,942,001 times
Reputation: 2938
Tar sands are the absolute dirtiest, costliest oil there is. Goes to show how desperate we are to keep the stuff flowing as the worlds supply of fossil fuels begins to run dry. In a decade or so the only kind of oil left will be the tar sands and in the deep oceans, which is much harder and costlier to extract than conventional crude. Which means the price per barrel will continue to double every few years. This can't be sustainable for very long.
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Old 11-25-2011, 03:41 PM
 
Location: Chicagoland
41,325 posts, read 44,874,903 times
Reputation: 7118
Yep, it was going to get there somehow, going to used, but now Americans will be out of those good paying jobs this project would have produced. Thanks again, obama-the-job-killer.
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