By Alison Sider and Alistair MacDonald
A Canadian pipeline operator and Texas refiner have received
licenses from the U.S. government, becoming the first companies to
say they can export Canadian crude oil from U.S. ports.
Pipeline operator Enbridge Inc's U.S. subsidiary, Tidal Energy
Marketing Inc., won a license to export Canadian oil from a U.S.
port, according to a spokesman for the Calgary, Alberta, company.
Valero Energy Corp., of San Antonio, said it has received a
license, valid for 12 months, allowing it to re-export a limited
amount of Canadian crude back to Canada via the U.S. Gulf Coast, a
spokesman said.
Valero's license will allow it to ship crude to its refineries
in Canada and the U.K.
The U.S. exports "will offer additional flexibility and
optionality that our customers have requested to enable them to
respond to rapidly changing market conditions and opportunities,"
the Enbridge spokesman said. The plan is to export less than 1.5%
of Enbridge's total U.S. shipments of 2.4 million barrels a day, he
said.
The company didn't provide the name of the port and declined
further comment.
Oil traders expect exports of up to 40,000 tons of heavy oil
from Enbridge to leave ports in Texas as early as this month for
refineries in southern Europe, the Reuters news agency
reported.
As the U.S. ramps up domestic crude production, Canadian oil
firms need to diversify their markets beyond the U.S., which now
accounts for 97% of Canadian crude exports.
Valero already has a license to send some U.S. crude from Texas
to its Quebec refinery. U.S. oil firms can obtain licenses to
export crude to Canada, in one of a handful of exception to the
export ban.
The new license will allow Valero to ship Canadian crude that
had been sent, via rail, to Gulf Coast back to Quebec. That is
something that the company said it would have liked to do when
winter weather recently delayed a unit train en route from western
Canada to Quebec.
"Making sure the Quebec refinery is fully supplied with North
American crude is our primary aim," spokesman Bill Day said. "We
would only send the oil to the U.K. if economics favored it, and
they currently do not."
With a few minor exceptions, U.S. producers aren't allowed to
export their crude, but companies can if they can prove their oil
is from solely foreign sources.
Crude production has ramped up in the North American shale basin
and Canada's oil sands, and existing infrastructure, geared to
refining crude within North America, won't be sufficient to get
projected output to market.
The question of getting oil out of Canada has become a
politically sensitive topic as Washington continues a year's long
debate over whether to approve the long-stalled Keystone XL
pipeline, which if approved would transport crude from Alberta's
oil sands to Gulf Coast refineries. Enbridge and other pipeline
operators are pushing to develop more pipelines to carry the oil to
ports, such as ones on the west coast of Canada.
The Bureau of Industry and Security, which approves applications
to export crude, didn't immediately return calls requesting
comment.
Write to Alison Sider at alison.sider@wsj.com and Alistair
MacDonald at alistair.macdonald@wsj.com
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