June 18 (Reuters) - U.S. refiner Phillips 66

said on Tuesday its margins have tightened after the expanded

Trans Mountain pipeline project in Canada started up in May.

The $24.84 billion expansion has nearly tripled the flow

of crude from landlocked Alberta to Canada's Pacific coast to

890,000 barrels per day (bpd).

"We are still exporting Canadian crude from the Gulf

Coast, though that is the first thing to get trimmed back,"

Phillips 66 CEO Mark Lashier said during the J.P. Morgan Energy,

Power & Renewables Conference on Tuesday. "It has tightened up

those margins."

U.S. oil refiners and West Coast traders have flagged

concerns about the quality of crude shipped on TMX, warning that

high vapor pressure and acidity limits could deter purchases of

Canadian heavy barrels.