Irving Oil gets regulator OK to move West Canada crude via tanker to New Brunswick

New York — Irving Oil has received regulatory permission to move Western Canadian crude in non-Canadian tankers to its 330,000 b/d refinery in Saint John, New Brunswick, according to filings with the Canadian Transportation Authority.

"The Irving applications to the Agency were in reference to the use of foreign and non-duty paid vessels that require certain approvals prior to starting commercial activities in Canadian waters. Such use is regulated by coasting trade legislation," the Canadian Transportation Authority said via email Thursday.

Irving made its application in light of recent events that have put the Canadian economy and energy sector in "a state of crises," Irving Oil said in its application to the CTA.

Irving received permission to use three non-Canadian vessels for three different routes. Each permit allowed volumes between 350,000 barrels and 1 million barrels, beginning April 21, 2020, and lasting through April 20, 2021.

The first permit was for movement of crude that was delivered by pipeline from Alberta to Texas or Louisiana, from the US Gulf Coast to Saint John via tanker.

The second was to move crude from the Westbridge Marine Terminal in Burnaby, British Columbia, to Irving's Saint John facility through the Panama Canal. Shipping market sources said the crude will most likely move on 70,000-mt Aframax tankers.

The third was to load Canadian crude from Whiffen Head, Newfoundland and Labrador and deliver it to the Saint John refinery, the Come by Chance refinery in Newfoundland and storage facilities at Point Tupper, Nova Scotia.

Irving Oil applications were received by the Canadian Transportation Authority on April 16, 2020, the agency said in the email.

"The determinations for each of these was issued on April 21, 2020. Irving Oil has applied for coasting trade licenses to transport crude through Canadian coastal waters in the past," the email added.

An Irving Oil representative was not immediately available for comment.

So far in the second quarter, Alberta's Western Canada Select has held a $13.13/b discount to West Texas Intermediate, compared with the first quarter's $17.79/b discount, according to S&P Global Platts pricing data.

Eastern Canada's Hibernia crude has averaged a $5.48/b discount to Dated Brent so far in Q2, compared with Q1's premium of 17 cents/b, according to Platts pricing data.