Canada's TMX expansion may triple oil flow to country's Pacific Coast

Robert Besser
23 Sep 2023, 01:30 GMT+10

From early 2024, the long-delayed Canadian government-owned Trans Mountain oil pipeline expansion is expected to nearly triple the flow of crude oil from Alberta to Canada's Pacific Coast
The pipeline expansion, which costs U$22.81 billion, will divert barrels currently delivered to refiners and exporters in the U.S. Midwest and Gulf Coast
After the TMX expansion, U.S. Midwest oil refineries that sit along Canada's existing main oil-export route and benefited from low prices could pay as much as $2 more per barrel

CALGARY, Canada: From early 2024, the long-delayed and controversial Canadian government-owned Trans Mountain oil pipeline expansion (TMX) is expected to nearly triple the flow of crude oil from Alberta to Canada's Pacific Coast.

The pipeline expansion, which costs U$22.81 billion, will divert barrels currently delivered to refiners and exporters in the U.S. Midwest and Gulf Coast, potentially shaking up North America's supply chain.

After the TMX expansion, U.S. Midwest oil refineries that sit along Canada's existing main oil-export route and benefited from low prices, such as BP, Citgo Petroleum, and Exxon Mobil, could pay as much as $2 more per barrel.

However, a last-minute proposed route change could delay the project by up to nine months. But once operational, Canada can transport an extra 590,000 barrels per day (bpd) to Pacific ports for delivery to U.S. West Coast and Asian refiners, where long-term demand for heavy sour crude could rise.

A Reuters Energy Information Administration data analysis showed that Canada has supplied the Midwest with all of its crude imports since 2019, meaning that Canadian oil producers are vulnerable to significant price discounts or "blowouts" when pipelines experience blockages or leaks.

Pipeline operator Enbridge, which transports most of Canada's 3.8 million bpd of crude exports to the U.S., said that once TMX opens, flows on its Mainline system will drop by up to 300,000 bpd.

Rory Johnston, founder of the Commodity Context newsletter, said the start-up of TMX could add a "buck or two" to the cost of a barrel for Midwest refiners.

Watch latest videos

News RELEASES

Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Malaysia Sun.

More Information

26 ℃

Fair in Subang

Southeast Asia

Section

Flight to Freedom: 121 Malaysians rescued from Myanmar's battle zone return home

KUALA LUMPUR, Malaysia - According to Malaysia's foreign ministry, 121 people, mostly Malaysians suspected of being victims of job scams, ...

Zardari blames 'some forces' for pulling back leaders with progressive vision

QUETTA, Pakistan - Asif Ali Zardari, Co-Chairman of the Pakistan Peoples Party (PPP), stated on Thursday that 'some forces' impede ...

EU voices optimism for Bangladesh's election: Calls for democracy, credibility

DHAKA, Bangladesh - The European Union (EU) expressed hope on Wednesday that Bangladesh would hold democratic, credible, peaceful, and participatory ...

Myanmar ethnic group alliance captures trade gate on Chinese border

NAYPYIDAW, Myanmar: Kyar Win, spokesperson for the Myanmar National Democratic Alliance Army, which launched a surprise offensive last month against ...

Thailand will downgrade growth forecast for 2023 to 2.7 percent

BANGKOK, Thailand: This week, Thailand's Deputy Finance Minister Krisada Chinavicharana said after a weaker-than-expected third quarter, the country will downgrade ...