Tuesday, September 2nd12.1°C
22736
22746

Suncor: Decision on Montreal coker coming late this year or early next

CALGARY - A project that would enable Suncor Energy Inc.'s Montreal refinery to process thick, tarry oilsands bitumen from Alberta could get the green light later this year or early in 2015, CEO Steve Williams said Tuesday.

The Montreal coker project is just one way Suncor is looking to cut crude costs at the refinery, which has long relied on pricey overseas imports.

"I expect to have on my desk by the end of this year the proposal for the coker project, so we'll be in a much clearer position toward the end of this year, maybe beginning of next year to decide whether we go ahead," Williams told analysts on a conference call to discuss Suncor's first-quarter results.

Suncor (TSX:SU) is not disclosing the estimated pricetag of the coker project, but Williams says it will cost much less to built in Montreal than in the cost-inflation prone northern Alberta market.

As well, much of the required equipment is already in Suncor's hands, as an earlier iteration of the project was shelved years ago.

In the meantime, Suncor has been able to supply the 137,000 barrel-per-day facility with cheaper inland crude using rail and ship.

During the first quarter, about 20,000 barrels per day of Western crude made its way to Montreal by rail, with the expectation of hitting an average north of 30,000 barrels per day for 2014.

Suncor figures its rail strategy saved it $20 million during the quarter, since the Montreal refinery had access to cheaper inland crude, rather than having to rely on costlier imports.

Some seaborne cargoes loaded with cost-effective U.S. crudes have also made their way to Montreal — an option Suncor uses on an "opportunistic" basis, Williams said.

By this time next year, Suncor says its Montreal refinery should be able to get 100 per cent of its crude from within North America — once Enbridge Inc.'s (TSX:ENB) Line 9 pipeline between southwestern Ontario and Montreal has been reversed and expanded. That project won regulatory approval in March.

"We're delighted with the news around the Line 9 reversal and anticipate that line being reversed plus or minus a few months on the end of this year. We're just working through the specific schedules on it now."

The improved market access was one of the reasons behind Suncor's record and better-than expected first-quarter results, announced late Monday.

Its shares were up more than 3.6 per cent at $42.85 in late-morning trading on the Toronto Stock Exchange.

Operating earnings were more than $1.79 billion, or $1.22 per share — widely beating the average analyst expectation of 93 cents, according to estimates compiled by Thomson Reuters

A year earlier, Suncor had operating earnings of $1.37 billion, or 90 cents per share.

Operating revenues, net of royalties, were $10.3 billion, up from $9.8 billion a year earlier.

Net earnings, which account for one-time items, were nearly $1.49 billion, or $1.01 per share, up from $1.09 billion, or 72 cents per share.

Suncor says it was able to capture world pricing on 96 per cent of its oil and gas production during the quarter.

Some 70,000 barrels per day have been able to make their way to the lucrative U.S. Gulf Coast market on a recently-opened TransCanada Corp. (TSX:TRP) pipeline starting in Cushing, Okla.

The Gulf Coast pipeline, which started up in January, was originally meant to be part of TransCanada's contentious Keystone XL proposal. But TransCanada opted to go ahead with the southern portion first while the larger and more controversial cross-border segment remained in limbo.

Company-wide production for the quarter was 545,300 barrels of oil equivalent per day in the quarter, down from 596,100 a year earlier, due to the sale of its conventional natural gas business and the shutting in of production in Libya.

However, output in the oilsands was 389,300 barrels per day, up from 357,800 during the corresponding 2013 quarter.

_ Follow @LaurenKrugel on Twitter

The Canadian Press


Read more Business News

22819


Recent Trending




Today's Market
S&P TSX15619.08-6.65
S&P CDNX1010.88-13.11
DJIA17067.56-30.89
Nasdaq4598.188+17.917
S&P 5002002.28-1.09
CDN Dollar0.9142-0.0007
Gold1267.10+2.10
Oil93.17+0.29
Lumber350.50+0.80
Natural Gas3.947+0.009

 
Okanagan Companies
Pacific Safety0.20+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.18-0.01
Cantex0.08+0.01
Anavex Life Sciences0.24-0.01
Metalex Ventures0.07-0.005
Russel Metals36.42-0.06
Copper Mountain Mining2.90-0.03
Colorado Resources0.165-0.015
ReliaBrand Inc0.100.00
Sunrise Resources Ltd0.0250.00
Mission Ready Services0.225-0.02

 



22929

FEATURED Property
20546037140 Brent Road
4 bedrooms 4 baths
$1,588,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Manage your behaviour

You can’t manage what you can’t control! You can’t manage the number of sales you’re going to make but you can manage the behaviour that will help you make those sales. Obvious...


At the Core: Lessons in pricing from Apple

Apple has taught many entrepreneurs the importance of design, how to create buzz when introducing new products to the marketplace, how to pioneer new technology and the importance of superior quality....


New Real Estate Brokerage in town

Move over “big guys” there’s a new brokerage in town featuring local expertise, long standing experience and a fresh boutique approach. Kelowna, August 31 2014 – You may have...

_








Member of BC Press Council