Oct. 29 (Bloomberg) -- Canadian crude strengthened relative to West Texas Intermediate after BP Plc announced it would start a coker at its Whiting, Indiana, refinery in November and begin running more heavy oil there.
Western Canadian Select crude in Alberta strengthened by $1 to a $34-a-barrel discount to WTI at 2:40 p.m., according to Net Energy Inc., a Calgary-based energy broker. WCS is a blend of heavy, high-sulfur crudes from west Canada.
BP Chief Executive Officer Bob Dudley said the refinery near Chicago will start a new 100,000-barrel-a-day coker in November and ramp up rates into 2014. The plant’s total capacity is 420,000 barrels a day.
“Once the coker is online, we expect the refinery to begin a three-month progressive transition to heavy feedstock, reaching full run rate capacity during the first quarter of next year,” Dudley said during a conference call.
BP upgraded the largest crude unit at the Whiting refinery to be able to process heavy crude earlier this year. In addition to the coker, it’s also building new hydrotreaters to be able to handle the higher sulfur levels in the Canadian crude.
“BP Whiting is going to really suck the last of the heavy barrels out of the system,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston.
Syncrude, a light, sweet, synthetic crude oil, remained unchanged at an $11.50 discount to WTI, according to Net Energy.
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