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Canada’s oil industry is looking east for new export outlets amid protracted delays building multibillion-dollar pipeline infrastructure to the West Coast.

IAN JACKSON/NYT

Secure Energy Services Inc. is working to open a new outlet for landlocked Alberta crude on Canada's East Coast, as big pipelines face mounting political and commercial opposition in Ontario and Quebec.

Construction is poised to start early next year on a rail-loading terminal on 250 acres of land at Belledune, N.B.

The terminal would have capacity to export 120,000 barrels a day (b/d) of crude transported by rail from oil fields in Western Canada, including fast-growing oil sands production.

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Canada's oil industry is looking east for new export outlets amid protracted delays building multibillion-dollar pipeline infrastructure to the West Coast.

A plan by TransCanada Corp. to shuttle as much as 1.1 million b/d from Alberta to export points in Quebec and New Brunswick has encountered pushback from eastern gas distributors concerned about losing capacity, threatening to delay the $12-billion project.

The plans for the Belledune rail facility show Canadian oil producers are seeking alternative ways to reach higher-priced international markets that don't involve lengthy regulatory hearings or major environmental studies.

Rayburn Doucett, president of the Belledune Port Authority, said he aims to close a sale of the coastal plot of land to an affiliate of Secure next month. The project will lead to stronger prices paid for Alberta crude, which has been subjected to discounts because of limited pipeline access, he said.

"It's not going to be a discount price like a lot of the oil that's being produced in Alberta goes for."

No capital cost has been disclosed, but plans for the New Brunswick rail terminal have been in the works for at least two years, according to corporate presentations by an affiliate of Secure.

In August, the Calgary-based company paid $107-million in cash and stock to acquire Predator Midstream Ltd., a Calgary-based logistics firm that specializes in rail shipments of crude. Today, work on the terminal is being led by Chaleur Terminals Inc., a unit of Predator.

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The terminal would receive crude from up to two 120-car trains a day using Canadian National Railway Co. lines.

A 1.2-million-barrel tank farm is planned at the site, with potential to add another 1.8-million barrels of storage capacity. The crude would be transferred by pipeline to tankers big enough to hold up to 650,000 barrels of oil.

The facility would also include a steam plant to facilitate shipment of oil sands-derived crude, according to environmental assessment documents.

A spokesperson for Chaleur said the company is negotiating with "several" different customers and that first shipments are slated to begin late next year or in early 2016.

A steady trickle of heavy crude has already made its way to eastern ports.

In September, Suncor Energy Inc. said it shipped its first batch of western heavy crude from the port in Sorel Tracy on the St. Lawrence River in Quebec.

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The oil was delivered to a storage terminal owned by Kildair Services Ltd. by rail, and subsequently sent to Europe.

Cenovus Energy Inc. has also shipped crude by rail to Canada's East Coast for processing at Irving Oil Ltd.'s refinery in Saint John, N.B.

In a recent presentation, Predator said it currently ships about 25,000 b/d of Canadian oil by rail the west, east and U.S. Gulf Coasts.

The company said it is seeking direct relationships with buyers in India, where it estimates Canadian crude could be shipped from Belledune by tanker at a transportation cost of between $2 and $4.50 a barrel depending on the size of the ship.

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