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View Diary: Keystone XL Fork in the Road: TransCanada’s Houston Lateral Pipeline (35 comments)

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  •  Why are they interested in BAkken? (1+ / 0-)
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    6412093

    cause the oil is of very good quality, API 36-42, similar in some respects to WTI.

    You'd have to ask Lake Superior, but I doubt Bakken and Alberta tar sands are in the same pipeline,IRCC almost all production from Bakken is shipped by rail, to the tune of 730kbpd. Bakken fetches $100/barrel, why mix it with oil that sells for $50/b......

    .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Wed Dec 18, 2013 at 03:00:52 PM PST

    [ Parent ]

    •  The $50 is the cost of oil at the source. (0+ / 0-)

      Once it reaches the coast it is worth global prices. The nearest comparable oil is Venezuelan medium/heavy which is currently around $97.40 at the Gulf Coast refineries. The Canadian oil can be extremely profitable once it gets to the refinery provided the cost of shipping is less than $47/bbl. The only thing that keeps the price low is a glut at the source.

      The price of oil depends more on it's accessibility to global markets than it does on it's characteristics. Even WTI will go up once the glut is removed at Cushing. Once a refinery is set to handle the heavy oils, it can make more money with value added products such as feed-stocks for chemicals and plastics.

      •  WTI is @ $96.90 last friday (0+ / 0-)

        $50 tar sands cost was from 2009?, lots of press on increased costs over the last 3 years. Over the last year tar sands has been discounted as low as $48.

        Or are you saying the $50 price tag is for Bakken?

        EIA and the State Dept >
        http://switchboard.nrdc.org/...

        The tar sands cost @ wiki is from 2009, and shouldn't be used.

        .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed Dec 18, 2013 at 04:16:14 PM PST

        [ Parent ]

        •  West Canada Select is now at $-29.2 discount over (0+ / 0-)

          West Texas Intermediate (WTI) which itself is at a discount of $-10 over the international Brent oil price.

          Because Bakken oil is moving mostly by rail to the Eastern markets and is avoiding the bottleneck at Cushing, it is trading at a $2.50 premium to WTI - closer to world market price.

          Watch what happens when the Keystone XL South pipeline begins discharging it's oil at the Gulf Coast in January.

          Also, rail shipments of oil are set to triple in 2014 so there will be a large impact on pricing.

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