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Here today (sort of), gone tomorrow (probably)?
We are talking about the refining/supply line infrastructure throughout North America, a system we as consumers have tolerated in the form of radical price swings which seemed directly proportional to the inexplicable childish pricing tantrums of the oil industry. We have been predicting for some time now that the weakest link in the integrated oil industry supply chain was that of refining and marketing… recent and future developments support this opinion.
Here’s what we mean.
We all know about Shell closing its Montreal refinery and we commented on the possible closure of the Chevron facility in Burnaby, citing it as only one of three of the Chevron family outside the U.S. We suggested that the future for Burnaby was bleak and so far we are pleased to say that we are wrong. However, beware the Ides of March. Such is not the case for the 210,000 bpd refinery in the UK as Chevron announced this week that they will seek out “likely buyers”. Hmmm just the same thing Shell said about Montreal.
The existence of a large number of refineries in the eastern part of the U.S. and to a certain extent in Eastern Canada may be in jeopardy due to the growing popularity of storage of not crude oil, but what are termed finished products those being gasoline, diesel, heating oil and jet fuel. An extremely large storage terminal located off the coast of Florida in the Bahamas with a current capacity of 21.5 million barrels is undergoing an expansion to increase this to 27.5 million barrels by 2011.
By: Roger McKnight, Senior Petroleum Advisor
How exactly do we put all of this into perspective? Find out in this week’s Energy Report. Sign up by sending your email to info@en-pro.com.