Trans Mountain oil pipeline nearly hits target for its first-month loadings

Initial Month of Trans Mountain Pipeline Expansion Sees Nearly 20 Ships Loaded

In its first full month post-expansion, the Trans Mountain pipeline on Canada's West Coast loaded around 20 crude oil ships, according to vessel-tracking data. This figure falls slightly below the operator's initial projection of 22 ships. The Canadian government, aiming to offload the $24.84 billion (C$34 billion) line, is closely monitoring these loadings. Questions about oil quality, pipeline economics, and loading challenges have emerged since operations began, raising concerns about the demand and export of crude oil.

Loadings and Export Destinations

Total crude exports from Vancouver reached about 350,000 barrels per day, with the final two vessels for June loading at the Westridge Marine terminal. The vessels, mostly partially loaded Aframaxes with a capacity of approximately 550,000 barrels each, primarily sailed to the U.S. West Coast and Asia. Some cargoes were transferred to larger ships destined for India and China.

Key Deals and Destinations

Reliance Industries secured 2 million barrels of Canadian crude for July delivery, a transaction involving four ship-to-ship transfers to load the oil onto a very large crude carrier off California's coast. This oil is headed for Sikka, India, home to the world's largest refining complex operated by Reliance. Other notable acquisitions included Phillips 66 for its Ferndale refinery in Washington, Marathon Petroleum for its Los Angeles refinery, and Valero Energy for its Benicia refinery in California.

Neither Trans Mountain nor Phillips 66 and Marathon Petroleum commented immediately, while Valero did not respond to comment requests.

Market Reactions and Future Utilization

Market analyst Rohit Rathod from energy researcher Vortexa stated that the market had anticipated 17 to 18 loadings. He noted that Chinese demand did not meet expectations, and if it weren't for Reliance, most of the June barrels would have stayed within the U.S. West Coast region. Trans Mountain has recently revised its crude oil acceptance standards on the expanded system, addressing concerns about oil acidity and vapor pressure.

Logistical Challenges and Capacity Projections

The narrow and busy shipping channel from the Westridge dock in Vancouver also poses logistical constraints that could affect loadings. The Port of Vancouver has imposed transit time restrictions to manage high traffic in this channel. Currently, the expanded Trans Mountain pipeline is operating at around 80% capacity, with some spot capacity in use. The operator forecasts 96% utilization from the next year onwards, and it has the capability to load up to 34 Aframax ships per month.