Adds details from conference, background
The 590,000 b/d Trans Mountain Expansion (TMX) pipeline is on track to begin loading crude onto vessels from Canada's Pacific coast in late March or early April, a Trans Mountain official said today.
Pipeline construction crews are preparing to complete the final stage of tunneling through a mountain to complete the pipeline after gaining a key regulatory approval on 12 January, said Jason Balasch, senior director of business development for Trans Mountain, speaking at the Argus Americas Crude Summit in Houston, Texas.
"That is scheduled to start any day now and should be done by early next week," setting the stage for Trans Mountain to begin filling the new line with crude in March, Balasch said.
Difficult terrain had threatened to delay the C$30.9bn project by up to 30 months, which would have been a major setback for Albertan crude producers as they push output beyond 4mn b/d for the first time.
Line fill will take two to three weeks and, "if everything goes according to plan, that will be finished in late March or early April and we will be ready to load ships at that time," he said, after gaining final approval from the Canada Energy Regulator.
The existing Trans Mountain pipeline, which will operate as Line 1, will carry about 350,000 b/d of light crude and refined products. Line 2, the new twinned line segment, will run at about 540,000 b/d and carry mostly heavy crude, he said. Most light crude and products will continue to head to land-based destinations in Canada and Washington state, and most Line 2 heavy crude will "hit the dock for marine loading," either to California or Asia, he said.
TMX has no set ramp-up timeframe for Line 2, but Balasch said he expects it to be at 75pc capacity in the first month of operation, gradually rising to full capacity before the end of the year.
TMX will nearly triple the capacity of the existing 300,000 b/d Trans Mountain system, which links Edmonton, Alberta, a key hub for Canadian oil producers, with Burnaby, British Columbia. It will be the first Canadian pipeline in decades to offer meaningful access to international markets without crossing the US.
Not a disaster
Loading at the Westridge Marine Terminal and its three new berths in Burnaby will be limited to Aframax vessels loaded to about 550,000 bl because of tide and draft restrictions, Balasch said. That is well short of the 700,000 bl crude cargo that the vessels are capable of carrying, which is "not full but not a disaster," he said.
One key constraint is that the Port of Vancouver will not initially allow night-time Aframax transits, but the port has approved spending on a vessel management tracking system that could allow inbound night-time Aframax transits as early as 2025, he said. Without night-time transits, Aframax vessels should be able to move more than 540,000 b/d of heavy crude from the port, rising to average 630,000 b/d once they are allowed, he said.
The port is also weighing a dredging project to deepen the channel to allow for deeper vessel drafts and a larger window to operate within the channel's tide timetable, he said.
The dredging project is still "a ways away," Balasch said, and "the nighttime transits in 2025 would be the first step in debottlenecking and derisking the marine logistics."
One key question has been whether TMX shippers will actively market their heavy crude barrels to overseas buyers or turn the crude over to trading houses and other logistics companies at the Westridge docks, where Trans Mountain's custody transfer occurs.
"The answer to the question is both," Balasch said.
Western Canadian producers will likely approach delivered freight deals with caution, but "I have had firm shippers indicate that they do intend to charter vessels," Balasch said.
Trans Mountain has also fielded questions from "name brand global crude marketing and trading houses" who have expressed interest in "how the nomination system works and how do we get in and get our ships loaded," he said.
By Chris Baltimore
https://www.argusmedia.com/en//news/2531159-crude-summit-tmx-outlines-path-to-startup-update-1?backToResults=true
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