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Canada's Trans Mountain expects more interest in pipeline system if US implements tariffs
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Canada's Trans Mountain expects more interest in pipeline system if US implements tariffs
Feb 4, 2025 1:27 PM

HOUSTON (Reuters) - Canadian pipeline operator Trans Mountain said it expects to see increased interest to ship on its system if the United States slaps tariffs on Canadian oil imports in a month.

The pipeline, which can carry up to 890,000 barrels per day of crude from Alberta to Canada's Pacific Coast, has been about 80% utilized, with about 20% capacity available for spot shipping at more expensive rate.

While exports of crude oil that flowed through Trans Mountain's pipelines represented only 9% of Canada's total crude exports, it has come in the spotlight after U.S. President Donald Trump said he would slap 10% tariffs on Canadian oil imports by the United States.

The tariffs, which were due to take effect on Tuesday, were paused for 30 days on Monday.

Nearly all of Canada's oil exports - some 4 million barrels per day - head to the United States to be processed by refiners or re-exported from U.S. Gulf Coast ports to Asia.

The Trans Mountain pipeline expansion, which started operations in May, provided Canada an alternative route to export more volumes of crude directly, primarily to Asia, and reduced the country's reliance on the United States.

"We anticipate there will be increased interest to ship on our system in the face of U.S. tariffs, but it is too early to predict what the volumes will be," Trans Mountain said in an emailed statement.

Deliveries to Asia are also likely to increase, the company said, adding that deeper discounts for Canadian crude were likely.

The company said it was investigating ways to improve the throughput efficiency and increase the capacity of the expanded system, ideally in the next four to five years under the current regulatory regime.

Exports from Vancouver averaged about 370,000 barrels per day in the last eight months, according to data from ship tracking firm Kpler. About 51% of that headed to Asia, primarily China, in 2024, while the rest went to the United States.

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