Canada’s Trans Mountain expects more interest in pipeline system if U.S. implements tariffs | Globalnews.ca

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 following the 30 day pause that was announced on Monday.

The pipeline, which can carry up to 890,000 barrels per day of crude from Alberta to the company’s terminal at Burnaby, B.C. has been about 80 per cent full, with about 20 per cent capacity available for spotshipping at a more expensive rate.

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

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 buyers in Asia.

The Trans Mountain pipeline expansion, which started operations in May, provides an alternative route to export a larger volume of crude directly to other markets, primarily Asia, thereby reducing the reliance on the U.S. market.

“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 efficiency and increase the capacity of the expanded system, in the next four to five years.

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