McKenna says Irving could refine western crude

Alberta oil companies should look east to refine their petroleum, former New Brunswick premier Frank McKenna says.

In a recent op-ed piece in the Financial Post, McKenna suggests a pipeline to Saint John could process Alberta oil at the Irving Refinery given difficulties with the Keystone XL pipeline out west.

In the article, McKenna said Canada should avoid putting "all of our oil into one basket."

With the extension to the American Keystone pipeline extension up in the air and delays to the Alberta-B.C. Northern Gateway project, McKenna said it's time to consider a pipeline out east.

Additions to Irving's refinery plant could handle the crude from Alberta's oil sands,said McKenna, who is deputy chairman of the TD Bank Group and member of the board of directors of Canadian Natural Resources Ltd.

"A new line could be built from Montreal to Saint John. One East Coast refinery, the Irving Refinery of Saint John, is the largest refinery in Canada and the largest refinery on the East Coast. It is capable of using heavy oil at the present time and with the addition of a coker could process raw bitumen into synthetic crude oil." he wrote in the Financial Post.

Carolyn Van der Veen, director of public affairs for Irving Oil, said it could possibly be done.

"We've processed Canadian crude in the past and may do so in the future if logistics are viable," she said.

Edward Kallic, of Ziff Energy Group in Calgary, said the demand to refine the oil is there, but a pipeline out east would not be the first option.

"I wouldn't think that building a big line into the east coast is going to be economically viable," he said.

Kallic said the oil sands production is exploding. Canada produces over 2.5 million barrels a day and that number will double by 2020.