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 Milwaukee Sun.

More Information

35 ℉

Mostly Cloudy in Milwaukee

International

Section

Migrants in Chicago, other northern US cities struggle to find homes

CHICAGO, Illinois: As winter sets in and with cold weather just around the corner, Chicago is struggling to house hundreds ...

12th century leaning tower in Bologna secured to save it from collapse

BOLOGNA, Italy: Due to fears of a collapse, local officials have secured the area around one of two 12th century ...

Flights, trains cancelled in Bavaria after heavy snowfall

MUNICH, Germany: The heavy snow and icy conditions that hit Bavaria, Germany, canceled flights and long-distance trains out of Munich, ...

North Carolina to add thousands of people to Medicaid rolls this week

RALEIGH, North Carolina: After a decade of discussions and hesitations, North Carolina has expanded Medicaid coverage by offering government-funded health ...

Pentagon secretly providing bombs for Israeli bombardments

The U.S. has supplied Israel with scores of BLU-109 bunker-buster bombs since October 7, the Wall Street Journal has reported, ...

Biden administration says EPA to replace lead water pipes in 10 years

WASHINGTON D.C.: This week, the Biden administration announced a proposal by the Environmental Protection Agency (EPA) that would require U.S. ...

Wisconsin

Section