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Trans Mountain oil pipeline loads 19 Aframax vessels in July, slightly below June levels
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Trans Mountain oil pipeline loads 19 Aframax vessels in July, slightly below June levels
Aug 1, 2024 10:24 AM

By Arathy Somasekhar and Nia Williams

HOUSTON, Aug 1 (Reuters) - About 19 Aframax ships loaded

around 330,000 barrels per day of crude oil in July at Canada's

West Coast in the second full month of operations on the newly

expanded Trans Mountain pipeline, slightly lower than June,

vessel-tracking data showed.

The pipeline loadings are closely watched for their impact

on global oil flows and freight rates. The pipeline's success is

also crucial to the Canadian government's plan to recoup its

investment by selling the $24.84 billion (C$34 billion) line.

July departures represent "pretty solid exports especially

given the demand in markets such as China haven't been

performing particularly well," said Rohit Rathod, an analyst at

energy data firm Vortexa.

Besides the 19, vessel Caspian Sea on Wednesday was moored

and prepared to load at the Westridge Marine terminal in

Vancouver.

Trans Mountain had loaded about 350,000 barrels per day

(bpd) on 20 Aframax vessels partially and one non-Aframax vessel

in June, the company said last month. It has the capacity to

load 34 Aframax ships a month.

The vessels, partially loaded Aframaxes able to carry about

550,000 barrels each, sailed largely to the U.S. West Coast and

China.

"We now have a group of vessels (Aframaxes) relocated to

America's west coast and engaged in carrying Canadian crude

either to the U.S. West Coast and even long haul to China,"

Vortexa's Rathod said.

Tanker Yuan He Wan loaded about 550,000 barrels of oil and

sailed to Ulsan in South Korea, marking the first cargo to head

to the Asia country since the expansion.

Refineries on the U.S. West Coast were still testing out the

heavy crude barrels available on Trans Mountain, and the cost of

using different-sized vessels to transport the crude was having

an impact on where the oil is being shipped, said Geoff Murray,

executive vice-president of commercial at shipper Cenovus Energy ( CVE )

.

Top U.S. refiners were key buyers of the crude in July.

"Marathon Petroleum's ( MPC ) Los Angeles Refinery, Valero

Energy's ( VLO ) Benicia refinery, Chevron Corp's ( CVX ) El

Segundo refinery were the typical destinations from the legacy

TMX pipeline loadings, and this remains the case as volumes ramp

up, with Phillips 66's Ferndale joining them in recent

months," said Matt Smith, an analyst at ship tracking firm

Kpler.

TMX did not immediately reply to a request for comment.

Chevron ( CVX ) and Valero also did not reply to requests for

comment, while Phillips 66 and Marathon Petroleum ( MPC ) declined to

comment.

Phillips 66 said this week the pipeline was running around

650,000 to 675,000 bpd and headed toward 700,000 bpd by the end

of the year.

"About two-thirds of incremental TMX barrels have gone into

Asia, which has been a bit of a surprise for us," said Brian

Mandell, a Phillips 66 vice president. The refiner benefited

from more barrels to the West Coast, he added.

TMX was estimated to be about 80% full, with all committed

capacity being used, two traders said. One of them added TMX was

running "exceptionally well."

Canadian oil shippers would be slow to utilize Trans

Mountain's 20% of uncommitted spot capacity because it is more

expensive than other pipelines, Cenovus' Murray added.

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