Imperial Oil remains confident in renewable diesel project

Imperial Oil Ltd. provided an update connected what will beryllium Canada’s largest renewable diesel facility, saying building of nan analyzable adjacent Edmonton is going good and should beryllium completed sometime adjacent spring.

The $720-million task nether measurement astatine Imperial’s Strathcona refinery is expected to person a capacity of much than 1 cardinal litres of renewable diesel annually.

The installation will usage locally originated rootlike oils and low-carbon hydrogen to nutrient a biomass-based fuel, helping group Imperial up for nan energy modulation by diversifying its petroleum-based portfolio, according to nan company.

Imperial president and CEO Brad Corson told analysts connected a convention telephone Friday that nan institution continues to consciousness bully astir its determination to move guardant pinch nan project, successful spite of nan truth that a caller glut of renewable substance proviso southbound of nan separator is hurting margins for producers of nan merchandise successful nan U.S.

“It’s important to separate nan marketplace that we spot and nan economical drivers for us, comparative to possibly what you are seeing successful different markets for illustration nan U.S.,” Corson said.

“For us, we proceed to spot this arsenic a highly economical project.”

Renewable diesel is chemically balanced to petroleum diesel. This intends it tin beryllium transported straight successful petroleum pipelines aliases sold astatine unit stations without immoderate infrastructure modifications aliases substance blending.

That makes it an charismatic proposition for substance refiners successful nan look of climate-driven regularisation specified arsenic Canada’s cleanable substance standard, which requires liquid substance suppliers to gradually trim nan c strength of nan fuels they nutrient and waste successful Canada.

According to nan Canada Energy Regulator, greater accumulation of renewable diesel is 1 measurement substance producers successful this state tin activity toward nan national target of reducing nan emissions strength of their products by 15 per cent beneath 2016 levels by 2030.

The CER says if countries are to execute their stated ambiance commitments, 35 per cent of nan world’s diesel substance proviso could beryllium renewable diesel by 2050.

The first stand-alone renewable diesel analyzable successful Canada, constructed by Tidewater Renewables successful Prince George, B.C., was completed past year, and location are a fistful of different projected projects crossed nan country.

But successful nan U.S., renewable diesel accumulation has been surging. Since 2021, renewable diesel and different biofuels accumulation capacity has much than tripled, according to nan U.S. Energy Information Administration.

Production of renewable diesel southbound of nan separator has now acold surpassed substance blending mandates established by nan U.S. Environmental Protection Agency, power analytics patient RBN Energy LLC says.

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In addition, nan glut of caller renewable diesel accommodation are having to compete pinch each different to unafraid nan feedstocks they request to nutrient nan product. (Renewable diesel tin beryllium made from rootlike oil, animal fats, utilized cooking lipid aliases moreover algae.)

Corson told analysts Friday that nan challenges facing nan U.S. renewable diesel marketplace are not issues for Imperial.

“We designed this installation to process cultivation feedstocks, oils that are disposable successful nan wide area. We’re sourcing from crops and farms that are comparatively close, truthful there’s not important proscription costs,” he said.

“What is besides unsocial versus what you spot successful nan U.S. is nan regulatory situation that we person here,” he added, emphasizing that regulatory incentives astatine nan provincial level mixed pinch nan national cleanable fuels modular supply much economical support for Canadian projects.

“All of those things together put america successful a different, but overmuch better, spot than what you mightiness spot successful nan U.S.”

Imperial Oil Ltd. saw a important spike successful nett income successful its 2nd quarter, which reached $1.13 billion, compared pinch a nett income of $675 cardinal a twelvemonth prior.

The summation seen successful nan play ended June 30 amounted to net of $2.11 per stock connected a diluted ground compared pinch $1.15 per stock successful nan 2nd 4th of 2023.

Imperial attributed nan maturation successful profit to nan mixed use of strengthened North American benchmark crude pricing, arsenic good arsenic nan opening of nan Trans Mountain pipeline description which has helped to trim nan discount Canadian producers person typically taken connected their lipid owed to a deficiency of export access.

Imperial’s accumulation successful nan 4th averaged 404,000 gross oil-equivalent barrels per time successful nan quarter, up from 363,000 a twelvemonth earlier.

Refinery throughput for nan 4th averaged 387,000 barrels per day, compared pinch 388,000 barrels per time a twelvemonth prior.