US West Coast Refiners Swap Expensive Iraqi Crude for Cheap Canadian Oil - OilPrice.com
US West Coast Refiners Swap Expensive Iraqi Crude for Cheap Canadian Oil | OilPrice.com
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Canada’s newly expanded Trans Mountain pipeline is now prompting American refiners on the West Coast to swap more expensive Iraqi crude with cheaper Canadian crude, Reuters reports, chalking up a 7X increase in June volumes.
The western U.S. states of California and Washington will be importing 150,000 barrels per day of Canadian crude in June, for a seven-fold increase, while Iraqi crude exports to U.S. West Coast refiners will drop from 76,000 bpd in May to just over 3,500 bpd in June, according to figures cited by Reuters.
The U.S. West Coast and Asian markets are expected to be the two top destinations for the crude now flowing through the expanded pipeline in Canada.
The new figures follow recently aired concerns by West Coast refiners of the high sulfur and acidity content and high vapor pressure that characterized the initial crude flows through the expanded Trans Mountain pipeline in Canada, Reuters reported earlier in June, citing unnamed sources.
In May, Canadian Natural Resources and U.S. firms Valero and Chevron filed complaints with the Canada Energy Regulator (CER) asking the limits to the Total Acid Number (TAN) and vapor pressure specifications on the Trans Mountain Expansion Project (TMX) be narrowed.
After years of delay, the Trans Mountain Expansion Project (TMX) went into operation last month, expanding access to markets for Canadian oil producers by tripling the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The Federal Government of Canada bought TMX from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the pipeline expansion have soared to nearly $23 billion (C$30.9 billion).
By Charles Kennedy for Oilprice.com
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