Speculation that BP will become a partner of Calgary-based EnCana Corp. has been stoked by BP PLC's announcement that it is making the largest investment to date in U.S. refining capacity to handle Canadian oil sands output. The company stated that it is in the final stages of planning a $3 billion upgrade of its Whiting refinery near Chicago.
The investment would increase the refinery's capacity to handle heavy crude from 85,000 barrels to 350,000 barrels a day.
BP is the only major oil giant without a stake in the Alberta oil sands.
EnCana Corp. hopes to produce 500,000 barrels of oil sands crude a day by 2015, and is close to deals to help process the output. A deal would probably include exchanging an interest in a refinery for a stake in oil sands production.
EnCana will announce a partner or partners by the end of this month.
BP said it is in talks to expand deals with current suppliers and has nearly completed agreements with other players.
The capacity to process additional oil sands is essential for the industry because of estimates that production from Alberta's Fort McMurray region could triple to three million barrels a day by 2015.
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