US pipeline reversal may challenge refiners

Monday, May 21, 2012

Reversal of the Seaway pipeline will bring U.S. Gulf Coast refiners the cheaper Midcontinent crude oil that they have wanted for the last 18 months -- maybe too much of it.

Indeed, increased imports of heavy, sour oil from Canada - awaiting U.S. approval of the planned Keystone Pipeline - will be key to making full use of the new U.S. bounty of shale oil, said Adam Bedard, president of the Bentek Energy consultancy.

"We'll see more and more blending as we mix heavy Canadian with light sweet to generate the equivalent of an intermediate sour, which will get it into refiners on the Gulf Coast. Certainly there's demand in the Gulf Coast for intermediate sour," Bedard told a conference in Houston last week.

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