Valero Energy Corp. and Chevron Corp. are buying oil shipped through Canada’s newly expanded Trans Mountain Pipeline system for their California refineries, according to people familiar with the shipments, a sign that US West Coast may become a significant market for oil-sands crude.
Author of the article:
Bloomberg News
Robert Tuttle and Lucia Kassai
Published Apr 19, 2024 • Last updated 2days ago • 1 minute read
(Bloomberg) — Valero Energy Corp. and Chevron Corp. are buying oil shipped through Canada’s newly expanded Trans Mountain Pipeline system for their California refineries, according to people familiar with the shipments, a sign that US West Coast may become a significant market for oil-sands crude.
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The cargoes of Cold Lake crude, a heavy grade produced in the oil sands, will be loaded on Aframax tankers in June out of the Westridge Terminal near Vancouver, according to the people, who asked not to be identified because the information is private. Chevron declined to comment, and Valero didn’t respond to an email seeking comment.
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The shipments — the first sales off the expanded pipeline to Western US refiners — follow sales to China’s Sinopec Group and Sinochem Group for delivery to Asia.
The Trans Mountain expansion, which will almost triple the capacity of the only oil pipeline system running from Alberta to Canada’s Pacific Coast, is scheduled to enter commercial operation on May 1 after years of construction delays and price overruns.
While the new pipeline was built to help break Canada’s near-total dependence on sales to US refiners by providing an outlet to Asia, some analysts argue that US West Coast refineries may become the preferred market. That’s because they’re closer and Trans Mountain can only load relatively small Aframax tankers that are able to access Vancouver.
The main producers of Cold Lake crude include Imperial Oil Ltd. a unit of Exxon Mobil Corp., as well as Cenovus Energy Inc. and Canadian Natural Resources Ltd., according to Crude Oil Monitor.
(Updates with Chevron declining to comment in second paragraph)
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