Parliamentary Commission on the Pipeline Line 9B Reversal Project - Access to Western oil is necessary to ensure the future of Quebec's refining industry

LÉVIS, QC, Nov. 27, 2013 /CNW Telbec/ - The future of Quebec's refining industry depends on having access to quality crudes at competitive prices, and this means access to Western oil. This is the conclusion of a submission presented today by Valero Energy Inc. (‟Valero") during consultations conducted by the Agriculture, Fisheries, Energy and Natural Resources Commission on the Pipeline 9B Reversal Project proposed by Enbridge.

‟The future of refineries depends on huge investments and these investments are made in the markets that are the most competitive. At present, 90% to 95% of the operating costs of the Jean-Gaulin refinery in Lévis are raw material-related. It is urgent for us to be able to diversify our supply sources in order to compete with other North American refiners which already benefit from Western oil at a lower cost. There is no doubt that the reversal of Pipeline 9B is vital for ensuring our competitiveness," explained Ross R. Bayus, President, Canadian Operations, Valero Energy Inc. before the Commission.

Since 2008, six refineries have announced their closure in North America's Northeast, including one in Montreal East in 2009, and more recently, another in Dartmouth, Nova Scotia. The increasingly strict regulations on products, which require massive investments, combined with the recent recession, have led to the closure of these refineries and several others that were considered more vulnerable. Only the refineries that are operating in a competitive environment are able to attract the investments needed for them to continue their activities.

‟Our challenge in a market undergoing profound change is for us to adapt and even take the lead. Otherwise, we run the risk of becoming marginalized and uncompetitive, despite the fact that, at Lévis, we own a world class plant in which we have invested almost $2 billion since 2001. We are lucky to have the option presented by Pipeline 9B as an immediate and safe solution," stated Mr. Bayus.

The Pipeline 9B reversal project would generate a total investment of almost $200 million for Valero in Quebec, most of which would go to its Montreal East facilities. This would entail the creation of about 200 jobs during the construction phase and 100 new permanent jobs related to the use of state-of-the-art ships to carry the crudes from Montreal to Lévis.

About Valero
Valero is the largest independent refiner and distributor of petroleum products in the world. Its assets include 16 refineries, with locations spread across the United States from the West Coast to the Gulf of Mexico, as well as in Canada and the United Kingdom, with a combined throughput capacity of 3 million barrels per day. Through Valero Energy Inc., its wholly owned subsidiary in Canada, it owns and operates the Jean-Gaulin refinery in Lévis, which has a current refining capacity of some 265,000 barrels per day, along with several other logistics infrastructures, including the Montreal East oil terminal, the most important of its kind in Canada, as well as the Pipeline Saint-Laurent that links its Lévis refinery and Montreal facilities. Its Canadian operations also make it a leader, especially in the field of industrial and commercial sales of petroleum products, and as a supplier to resellers and independent distributors. Valero Energy Inc. is also one of the largest employers in Eastern Canada, in terms of the direct and indirect employment it generates.

SOURCE: Valero Energy Inc.

Michel Martin - Director, Public and Government Affairs
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