Canadian oil shipments to Los Angeles hit the highest in four years this month ahead of the formal launch of the expanded Trans Mountain pipeline that is expected to boost export volumes further.
According to Vortexa data cited by Bloomberg, three tankers carrying a combined 1.74 million barrels departed from the port of Vancouver this month bound for LA. At least two of these were purchased by Marathon Petroleum, which has a refinery in LA.
Bloomberg notes that Marathon Petroleum has reserved capacity on the expanded TMX, meaning this increased tanker traffic from Vancouver to Los Angeles may be a sign of things to come.
In fact, the report cited a note from Poten & Partners as saying Canadian crude for Californian refineries could replace Iraqi, Saudi, and Latin American crude when TMX comes online.
The expansion of the Trans Mountain pipeline from Alberta to British Columbia has been plagued by delays, environmentalist opposition, including in court, and a significant increase in the price tag.
Opposition from environmentalist organizations and the government of British Columbia was so fierce at one point that the original owner of the pipeline, Kinder Morgan, gave up on the project and the federal government of Canada had to buy it, spending some $$3.3 billion. After the purchase, Ottawa had to make Trans Mountain work by any means necessary, which led to additional expenses of as much as $23 billion.
Despite all these, the expansion is nearing its completion which would result in its total capacity rising to 890,000 bpd. Alberta oil producers are looking forward to the completion of the pipeline and already boosting production in anticipation of the sizeable additional offtake capacity. In November 2023, the oil province booked a record output of over 4 million barrels daily-a rate that was maintained in December, too.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More