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Canadian Refinery Overview 2018 – Energy Market Assessment
Canada’s total refining capacity is 295 103m3/d (1.9 MMb/d) (Figure 3). Quebec and Atlantic Canada have the most refining capacity at 124 103m3/d (782 Mb/d), followed by western Canada at 109 103m3/d (686 Mb/d) and Ontario at 62 103m3/d (390 Mb/d).
Canadian refineries have different characteristics depending on their location. Generally, refineries are located on major waterways, near major cities or near crude oil production. Being on a major waterway gives a refinery access to offshore crude oil as well as export market access for its RPPs. Being close to a large city provides a market for its RPPs and lowers the cost of transportation. Being close to crude oil production gives a refinery ample local supply at low transportation costs.
Most Canadian refineries are owned by vertically integrated companies, which have crude oil production, refining and product marketing. The refineries in western Canada have access to western Canadian crude oil production; therefore, domestic crude oil supplies meet all of their feedstock needs. The refineries in Ontario used to import crude oil from around the world to supplement their needs. However, the recent reversal of Enbridge Line 9 provided greater access to western Canadian crude oil and U.S. imports. Quebec also receives crude oil on the reversed Line 9 and processes western Canadian crude oil, as well as U.S. imports. Refineries in Atlantic Canada import most of their crude oil and process some domestic east coast production. Refineries base their crude oil purchasing decisions on access and economics. Currently, refineries in Atlantic Canada have no pipeline access to western Canadian crude oil and this is why the eastern Canadian refineries use mainly imported crude oil rather that Canadian productionFootnote 1.
Refineries in western and central Canada receive the majority of crude oil via pipeline, with smaller volumes transported by rail. In Atlantic Canada, most of the crude oil is delivered by tanker with smaller volumes transported by rail.
The History of the Enbridge Line 9 and its importance to the Canadian Refining Industry
As a result of the 1973 Organization for Petroleum Exporting Countries (OPEC) embargo, the Government of Canada, concerned about the potential vulnerability of central Canadian refineries which imported crude oil, asked Interprovincial Pipeline (IPL, now Enbridge) to extend its pipeline system from the Toronto area to Montreal. In 1975, the Government entered into an agreement with IPL to construct an extension from Sarnia to Montreal. The Line had a capacity of 50 103m3/d (315 000 b/d).
Between 1976 and 1997, Line 9 supplied refineries in Ontario and Quebec with western Canadian crude oil via Sarnia after being shipped through the U.S. In 1999, because of increased global oil supply, Line 9 was reversed allowing overseas crude oil (which was already being imported at Portland, Maine and transported on the Portland-Montreal Pipeline to Montreal refineries) to be shipped further westward on Line 9 to reach refineries in Ontario. During that time, Line 9 had a capacity of 38 160 m3/d (240 000 b/d).
In 2011, with lower North American crude oil prices relative to imported crude oil, the line was underutilized and Enbridge applied to the Board to re-reverse a section of the pipeline between Sarnia and North Westover, Ontario. In 2013, the first phase of the Line 9 reversal was completed, allowing transport of North American crude oil to more refineries in Ontario. In 2012, Enbridge filed an application with the Board to reverse the remaining section of Line 9, between North Westover and Montreal and expand the capacity to 47 700 m3/d (300 000 b/d). Since 2015, growing supplies of western Canadian and U.S. crude oil have been reaching refineries in Quebec.
Figure 3: Canadian Refineries and Capacity
Source: Canadian Association of Petroleum Producers (CAPP)
This map shows the location of the Canadian refineries, capacity and their market regions.
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