"Canadian Shipping Pipeline” to the U.S Gulf

[I]Genmar Daphne[/I] Steaming up the Houston Ship Channel with assistance from tugboats. The 106,000 tons DWT crude oil tanker owned by General Maritime. Credit: Roy Luck

[FONT=inherit][B]Cost Estimates:[/B]
[I]Commodity $/bbl:[/I]
[B]ECC/Europe[/B] aframax Montreal/Gdańsk, [I]Poland[/I] Round-Voyage estimate $3/bbl[I]²[/I].
[B]ECC/US: [/B]under $2.73, marine transportationhas the potential to cannibalize crude-by-rail shipped volume to the USWC.

[I]Shipping $/Day:

TCEestimates calculated by CR Weber for the Genmar Daphne were ~$18,517/day ECC/USG. and ~$12,759/day for Caribs/USG (rates are very depressed , we hit the $45,000/day mark last summer)
[I]I’m not sure about the reason for a 45% premium into the Aframax units calling ECC.


Maybe it’s because the Oil company leasing the aframax unit can take a voy from USG to the ECC for another company before loading the Canadian crude cargo bound to the USG ?

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Basis Aframax 66,000MT (RV)





[I] Calculations made by Simon Jacques Commodity Merchant Trading², George Los CR Weber*.


[FONT=inherit]Enbridge is scheduled to begin filling Line 9B with crude by Oct. 15th and gradually they will ramp-up to 300,000 per day.Then we will have the Pipeline called TCP’s [I]Energy East[/I], this one is[B]a monster[/B] with 1.1 million per day in 2017.[B]To give you an idea it us more than entire oil production in the UK or the entire North-Sea![/B][I]The volume traded in the ECC(East-Coast-Canada) [/I][I]is still very limited compared to USG/Caribs or Baltic/UKC[/I]
Suncor is currently displacing 4-5 aframax units/month from other regions.
[B]Institute Warranty [I]Limits: [/I]For St Lawrence River and its tributaries, [/B][FONT=inherit]seasonal restrictions are from December 1 to April 15th.[/FONT]
[B]In the Baltic: [/B]10 December to 25 May. This winter element will also need to be built into the aframax curve.


[B]Inland Crude Transportation[/B]
I heard that the first cargo to Italy was finally a [I][FONT=inherit]Lloyd blend conventional crude[/I] produced by[B] Husky Energy[/B] (quite similar to the WCS) and there are dozens producers seeking crude marketing alternatives in Canada.


Currently railing crude from Alberta to Montreal is just below 12$/bbl, shipping it from Montreal to the U.S Gulf Coast by vessel; $3.49/bbl.

When the Endbridge pipeline will ramp-up, the land cost will drop by 2/3, if they Albertan Oil company can lock the freight leg, they will be able to improve their bbl net back.

[I]Albertan shippers want to export the WCS crude to the U.S Gulf Coast, Europe, India…


Some will say that the commitment of Canadian Oil producers to the St-Lawrence River and ECC is a direct consequence of President Barack Obama’s unwillingness to give the presidential seal for the Keystone XL Pipeline.

The Irony is that what they cannot build on land is just good news for shipping, “the Canadian to U.S Gulf shipping pipeline”.