The Trans Mountain Expansion (TMX) crude pipeline to Canada's west coast is expected to bring additional oil exports to the US west coast and possibly Asia-Pacific in 2024 — barring any further delays — but where the ships will be drawn from is unclear.
The expansion will increase Trans Mountain pipeline capacity by 590,000 b/d to 890,000 b/d, with most of the additional volume likely to be exported through Vancouver's Aframax-exclusive Westridge Marine Terminal. But Vancouver's distance from active Aframax trading regions may challenge the ability of shipowners to provide the necessary tonnage in a timely manner, according to shipbroker Poten.
"It is not going to be easy to integrate the Trans Mountain exports into the existing spot trading patterns, due to the number of ships required and the long distances from traditional trading areas," Poten said in a recent weekly research note.
With three berths at Westridge, the terminal would load around one Aframax per day if the pipeline runs at full capacity, although some market participants expect Aframax loadings closer to about 15 per month. The highest concentration of Aframaxes that could relocate to Canada's west coast are in Asia-Pacific or in the Gulf of Mexico and Caribbean.
But moving Aframaxes from those regions to Vancouver could present timing issues, with transit times from China or the Mideast Gulf at about 17 days and 34 days, respectively, Poten said.
Relocations from the Gulf of Mexico or Caribbean would take about 18 days in ideal circumstances, but low water levels and long wait times at the Panama Canal likely would delay vessels in 2024.
"It is unclear how long this situation will persist, but it indicates that the US Gulf cannot be relied on as a consistent source of tonnage," Poten said.
Some Aframaxes that operate on the US west coast for lightering operations near Los Angeles could be available for Vancouver-loading crude cargoes, analytics firm Vortexa said in a recent weekly research note, noting how there are no other nearby viable options for ballasters to come from. Those Aframaxes are used to discharge oil from very large crude carriers (VLCCs), mostly from the Mideast Gulf or Brazil. It would take about four days for an Aframax to reposition from southern California to Vancouver.
Aframaxes that are used to haul Ecuadorean oil to either the US west coast or Panama's west coast could also be drawn to Vancouver, Poten said. Those trips take about 14 days, according to Vortexa.
Trans Mountain warns of delay
But the new source of Aframax demand growth could be delayed by another two years from its first half 2024 start date if a variance in construction is not allowed, the operator said on 14 December.
Trans Mountain is seeking the use of a smaller 30-inch pipe for a difficult part of the route where hard rock and several "complex" challenges have been encountered. As it stands, Trans Mountain is boring a 48-inch space to install a 36-inch pipe, but that effort is causing premature wear on tools and bedrock fractures resulting in water entering the space.
Regardless of when the project comes online, several issues could hamper exports at Westridge Marine Terminal, chief among them tides in the Vancouver Sound. A 15ft (about 5m) difference between high and low tides limits the window in which Aframaxes can enter and exit the terminal.
Additionally, the region has an insufficient number of trained marine pilots, who are required to facilitate the movement of tankers into and out of terminal, shipbroker BRS said earlier this year.
