by Mark Cardwell

Multinational Valero Energy has chosen Groupe Desgagnés to carry Alberta crude oil from Valero’s terminal in east-end Montreal to its refinery in Lévis, Que. And officials with the Quebec City-based merchant marine company couldn’t be happier.

“This is a big day for us and for the entire Canadian maritime industry,” said Jacques Beauchamp, President and General Manager of PetroNav, a wholly owned subsidiary of Groupe Desgagnés. “I think it’s great that (Valero) went with a Canadian company and people with extensive river experience.”

Under the terms of the ten-year deal, announced March 20, Valero and Desgagnés have created a joint venture called Transports Maritimes Saint-Laurent. The new company’s assets already include two used Panamax ships that will be delivered in April. Built in Crotia in 2007, the two 750-foot-long vessels are each capable of carrying 350,000 barrels of oil per voyage.

They are expected to begin making the 200-kilometre trip along the St. Lawrence River between Montreal and Quebec City in October, when the oil pipeline from Western Canada is expected to begin flowing into Valero’s Montreal terminal.

The recently-approved move is expected to put an end to Valero’s decades-old dependence on overseas crude, mostly from Algeria, Kazakhstan and Angola, at its Lévis refinery, which is the second largest in Canada.

According to Beauchamp, the deal is a happy ending to many months of discussions between Desgagnés and officials at Valero’s Montreal office and the multinational’s headquarters in San Antonio, Texas. Valero, he noted, has long been a customer of Desga­gnés, whose fleet of 18 Seaway-size ships regularly carries gasoline, jet fuel and diesel from the Lévis refinery to ports in Ontario, Quebec and Atlantic Canada.

“This all started a few years ago when (Valero) started asking us general questions about how and if we could transport oil along the river from Montreal to Levis,” recalled Beauchamp. “Their big concerns were about safety and reliability.” He noted that Desga­gnés ships have safely sailed that same corridor 1,500 times over the past five years. Beauchamp said that when Valero’s questions became more pointed, his company took the initiative of bringing together a working group of its ship captains and creating a thick binder with details on everything from shipping regulations and historical water levels in that section of the river, as well as suggestions as to the best vessels to use for maximum draft and payload.

“The Panamax ships,” Beauchamp said the study concluded, “give us the best bang for the buck.” The deal was finalized only days before the official announcement. “Our plan is to be able to completely stop importing crude from the Atlantic basin by the end of this year,” Valero spokesman Michel Martin said. “On an economic basis and on a logistical basis, it’s a huge change.”

Beauchamp said that once pipeline oil starts to reach the island of Montreal, the two ships will sail between the terminal and the refinery “like two ferries that leave opposite sides of a river simultaneously.” Until then – and during periods when the terminal or refinery is shut down for maintenance – Desgagnés will use the ships to carry oil in other markets.

Beauchamp estimated that 100 new jobs will be created for crew members on the two ships, not to mention the repair and maintenance and other related jobs that the double-piloted ships will generate. “This is something new and exciting for us and the whole industry here,” he said. “We’ve been getting calls from people throughout the maritime industry – even from our competitors – saying how happy they are for us.”