The tragedy in Quebec, involving the derailment of a unit train hauling crude oil from the “Bakken” fields in the Midwest, eastward across the prairies and through Canada, may bring a focus on rail safety, which, in turn, could have implications for tanker trades.
The train, operated by the Montreal, Maine & Atlantic Railway, was enroute to the Irving Oil refinery in St. John, New Brunswick, Canada. Railborne exports of US crude to Canada, and subsequent export of refined products, have been a feature of the shale oil boom of the past three years. Shipments of gasoline from Canadian refineries, including St. John, down to markets in New York, have grown creating a disadvantage for receivers of domestically refined products shipped upcoast on Jones Act vessels.
It is far too early to predict whether a close look at railway safety will force a slowdown in eastbound railcar crude shipments, which have found their way on to tankers for export from Albany, on the Hudson River. The dramatic expansion of rail shipments of crude may have outpaced the ability of the infrastructure, and the existing equipment, to handle it. There is likely to be a renewed “conversation” about pipeline versus rail alternatives for moving crude oil from Bakken, and other sources of shale oil
About a hundred miles south of Albany, in the New York metropolitan area, a round of hearings on a potential facility for bringing gas, shipped from Trinidad as LNG, into the distribution grid, highlighted some of the difficulties for developing new supply lines.
The waters in the Atlantic Bight, 20 miles outside the mouth of New York harbour, would be the site for the “Port Ambrose” project- a receiving buoy that would take cargo from vessels with onboard LNG re-gasification capability. This solution is a re-working of a previous proposal that had been vetoed by Chris Christie, New Jersey’s governor, we might add and a likely Presidential candidate in 2016.
The promoter of the Port Ambrose project, a Canadian investment firm that is also developing a project on the Irish Sea near Blackpool- Port Meridian, works in partnership with Höegh LNG- the initial stakeholders in the UK project. The UK template sees Höegh LNG as the supplier and operator of the FSRU for the planned LNG import terminal, while the commercial agreements and landside connections would be handled by Meridian.
Such projects face an uphill fight in the New York area, in spite of the fact that additional gas fired power plants are being built in the region. At public hearings held at Long Island and New Jersey waterfront communities, hosted by the US Coast Guard, the hysteria was palpable, in spite of successful FSRU experience up the coast. An Excelerate Energy project- the “Northeast Gateway” was a conduit for imports of gas into the Boston (Massachusetts) market before price differentials saw gas diverted to other receivers.
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