Cold blast freezes Canadian oil sands solid, forcing lower prices
https://www.worldoil.com/news/2020/1/16/cold-blast-freezes-canadian-oil-sands-solid-forcing-lower-prices1/16/2020
An arctic blast sweeping across Western Canada is weighing on the price of heavy crude.
Temperatures of -30 degrees Celsius (-22 Fahrenheit) and lower have descended on Alberta and Saskatchewan -- cold enough to render the region’s viscous oil rock solid. To transport it, producers must blend in more of a lighter crude called condensate, thereby reducing the volume that can be shipped by pipeline and increasing transportation costs, according to Kevin Birn, IHS Markit’s director of North American crude oil markets.
At the same time, trains that are shipping crude out of the pipeline-bottlenecked region must move slower in the chillier weather. Local demand for the oil is also threatened. On Tuesday, operations at Imperial Oil Ltd.’s refinery near Edmonton were disrupted due to the cold weather, the company said.
Natural gas supplies to parts of the oil sands-producing region, where the fuel is used to make steam for loosening bitumen so it can be extracted, were also disrupted on the NOVA Gas Transmission system as “extreme cold weather that has resulted in reduced receipts, high Intra demand and unplanned outages,†according to a notice from TC Energy Corp.
“The cold weather across the province is resulting in the inability for some customers to produce gas onto the NGTL system, while the system is experiencing peak demand,†TC Energy said in an email. “As a result, some central and northeast Alberta industrial customers are affected by lower-than-usual gas pressures.â€...
