American refiners have long benefited from discounted Canadian oil prices, to the detriment of the Alberta treasury..But that’s about to change, when — and if — the troubled Trans Mountain expansion to Burnaby is completed by the end of the year..And it’s the Yanks who are going to have to buck up by as much as US$2 per barrel of heavy crude presently flowing into Midwest refineries in Illinois and Ohio when those barrels are diverted to the West Coast..That’s because Canada accounts for virtually all of the oil imported into the US’ Petroleum Administration for Defence District (PADD) 2, which accounts for the largest concentration of US refining capacity outside the Gulf Coast..Even there, the realignment is expected to reduce flows by as much as 330,000 barrels per day that would have otherwise been re-exported through US ports. That in turn is expected to ease congestion on existing pipes all the way back up to Edmonton and stabilize markets, which translates into lower discounts for Canadian crude.."They will be competing for barrels that no longer transit through their region," an anonymous Calgary-based oil trader told Reuters. "The market will have to reshuffle.".That’s assuming it gets finished on time..Trans Mountain representatives on Tuesday were appearing before the Canadian Energy Regulator (CER) to press its case to reroute a 1.4 km section of line near Kamloops that would cross sacred native territory, and specifically a ‘directional tree.’ .The company has warned if it isn’t allowed to divert the section of line, final completion could be delayed a minimum of nine months — and possibly more than a year to December 2024 — adding another $800 million onto its already bloated $30.9 billion price tag..Despite the delays, Alberta Premier Danielle Smith told reporters at the World Petroleum Congress in Calgary Monday that she’s confident TMX will remain a viable — and profitable — economic proposition despite the delays..And she said Alberta was prepared to help the federal government offload it into the private sector or aboriginal community via the Alberta Enterprise Corporation or other local institutions..Oil prices continued their upward trajectory on Tuesday; North American benchmark West Texas Intermediate was up $1.30 to $92.78.
American refiners have long benefited from discounted Canadian oil prices, to the detriment of the Alberta treasury..But that’s about to change, when — and if — the troubled Trans Mountain expansion to Burnaby is completed by the end of the year..And it’s the Yanks who are going to have to buck up by as much as US$2 per barrel of heavy crude presently flowing into Midwest refineries in Illinois and Ohio when those barrels are diverted to the West Coast..That’s because Canada accounts for virtually all of the oil imported into the US’ Petroleum Administration for Defence District (PADD) 2, which accounts for the largest concentration of US refining capacity outside the Gulf Coast..Even there, the realignment is expected to reduce flows by as much as 330,000 barrels per day that would have otherwise been re-exported through US ports. That in turn is expected to ease congestion on existing pipes all the way back up to Edmonton and stabilize markets, which translates into lower discounts for Canadian crude.."They will be competing for barrels that no longer transit through their region," an anonymous Calgary-based oil trader told Reuters. "The market will have to reshuffle.".That’s assuming it gets finished on time..Trans Mountain representatives on Tuesday were appearing before the Canadian Energy Regulator (CER) to press its case to reroute a 1.4 km section of line near Kamloops that would cross sacred native territory, and specifically a ‘directional tree.’ .The company has warned if it isn’t allowed to divert the section of line, final completion could be delayed a minimum of nine months — and possibly more than a year to December 2024 — adding another $800 million onto its already bloated $30.9 billion price tag..Despite the delays, Alberta Premier Danielle Smith told reporters at the World Petroleum Congress in Calgary Monday that she’s confident TMX will remain a viable — and profitable — economic proposition despite the delays..And she said Alberta was prepared to help the federal government offload it into the private sector or aboriginal community via the Alberta Enterprise Corporation or other local institutions..Oil prices continued their upward trajectory on Tuesday; North American benchmark West Texas Intermediate was up $1.30 to $92.78.
