Market Snapshot: Canada’s refining capacity increases, despite fewer refineries
Release date: 2018-04-11
Canada used to have many small refineries, it now has a fewer number of relatively larger refineries. Despite a decline in the number of total refineries, the average capacity per refinery in Canada has increased. The average capacity per refinery in 2016 reached an all-time high of 18 084 m³/d (113 750 Mb/d). This indicates that consolidation has resulted in larger refineries.
Between 2005 and 2013, three refineries closed in central and eastern Canada: Imperial Oil Dartmouth (2013), Shell Montreal (2010), and Petro Canada Oakville (2005). While the ageFootnote 1 and lack of complexity of those refineries was a factor, environmental regulations for gasoline, overall declining demand for refined petroleum products, and higher crude oil costs for central and eastern refineries led to the closure and consolidation of smaller refineries in favour of larger ones.
In 2012, one refinery also closed in western Canada, the Parkland refinery in Bowden, Alberta.
Source and Description
Source: Canadian Association of Petroleum Producers
Description: In 1947, there were 32 refineries in Canada with an average capacity per refinery of 1 300 m³/d (8 177 b/d). The total number of refineries increased and by 1958 there were 45 refineries with an average capacity of almost 3 000 m³/d (18 870 b/d). The total number of individual refineries decreased steadily since 1958, while the average capacity per refinery steadily increased. The average capacity per refinery in 2016, reached 18 10m³m³/d (114 000 b/d).
One reason why there have been refinery closures in central and eastern Canada is the higher price of imported crude oil. Refineries in Ontario, Quebec, and Atlantic Canada, which import light crude oil priced at Brent, saw their crude oil costs rise, particularly between 2011 and 2012, when the differential between Brent and WTI reached as high as 27$ per barrel. On the other hand, refineries in western Canada had access to less expensive western Canadian crude oil.
Before the Sturgeon refinery located northeast of Edmonton began operations in 2017, no new refineries had been built in Canada in 30 years.
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