After a lengthy, nearly 12,000 km journey from British Columbia through the Panama Canal, the first shipment of Alberta crude oil has arrived on Canada’s East Coast.
The Cabo De Hornos — loaded with oil from Calgary-based Cenovus Energy — departed the Trans Mountain Terminal in Burnaby, BC., on June 18.
The vessel’s nearly month-long circuitous route to Saint John was a journey made out of necessity, according to industry analysts, as Canada’s oil sector works to make due without the cancelled Energy East Pipeline project.
“The idea that we would send a tanker from the west coast all the way down through the Panama Canal back up the east coast to a refinery in our own country is certainly a clumsy solution,” said David Yager, an analyst with Yager Management Ltd.
The Saint John-based Irving Oil had backed the Energy East project, which would’ve connected their refinery to producers out west.
But the idea was dropped in 2017 after outspoken opposition from environmental groups and the governments of Ontario and Quebec.
Despite New Brunswick Premier Blaine Higgs voicing support for resurrecting the project, nothing has materialized.
In a statement on Tuesday, the Alberta Energy Minister said the job of getting crude oil to refineries in Eastern Canada “would be much simpler if Energy East was built rather than suffocated by an onerous review process.”
“Alberta companies always find innovative ways to get things done and this is good news for Alberta producers and Canadian refiners,” said Sonya Savage.
The shipping route through the Panama Canal was approved by Transport Canada in May and the Cabo De Hornos is the first vessel to make the trip.
The arrival of the tanker off the Saint John coast is being celebrated by Cenovus Energy, who welcomed their “first-ever” transaction with Irving Oil.
“We were pleased with the economics of this transaction for Cenovus and excited to work with another strong Canadian company like Irving Oil,” said Keith Chiasson, vice president, downstream, at Cenovus.
“It’s encouraging to see more Canadian-produced oil refined at a Canadian refinery. It’s a one-off shipment for now, but we believe this Canadian success story has the potential over time to create significant value for both companies and the entire country.”
The news was also welcomed by Irving Oil.
In a statement, a spokesperson for the company said they “remain committed to pursuing opportunities that strengthen our position in the Atlantic Basin while creating value for our business and our customers.”
The Panama Canal could be used to get oil to the east coast for at least the foreseeable future with Cenovus leaving the door open to that possibility.
Meanwhile, the Trans Mountain Pipeline expansion and the Keystone XL Pipeline remain under construction, both of which could dramatically increase the amount of Alberta oil that makes its way east.