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Canadian crude oil shipments to Los Angeles are surging, a possible preview of how the expanded Trans Mountain pipeline that’s nearing startup may redraw flows along the Pacific Coast.
Three tankers carrying a total of 1.74 million barrels sailed from Burnaby to the biggest U.S. West Coast city in March, the most in at least four years, according Vortexa tanker data. At least two of the shipments of heavy Cold Lake crude from the oilsands went to Marathon Petroleum Corp., which operates a refinery in Los Angeles. The U.S. refiner declined to comment.
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Marathon’s ramp-up of Canadian crude imports could be a sign of things to come once the Trans Mountain pipeline’s expansion — which will nearly triple the capacity of the line running from Alberta to the Pacific Coast to 890,000 barrels a day — starts operating in the second quarter.
The U.S. refiner is a contract shipper on the new pipeline.
While the first two cargoes off the expanded system — also known as TMX — are expected to go to China, some analysts argue that U.S. West Coast refineries may become the preferred market due to the proximity and the relatively small Aframax tankers that are able to access Vancouver’s port.
Canadian crude may displace oil from Iraq, Saudi Arabia or Latin America, Erik Broekhuizen, tanker researcher for Poten & Partners, said in a note.
“The short shipping distance from Vancouver gives the TMX crude competitive transportation costs,” he said.
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