Thursday, June 13, 2024

Trans Mountain pipeline at risk over quality of Albertan crude oil

So, you know that Trans Mountain Pipeline extension (TMX) the government spent billions of taxpayer's money on to transport Alberta heavy crude oil to the Pacific coast? Well, it may have nearly tripled shipping capacity, but it turns out that a lot of American refiners on its West coast don't like it.

The oil that is. The heavy crude oil that is produced in Alberta's oil sands is very "sour" (i.e. it has a high sulphur content), has high acidity, and comes with a high vapour pressure. All of this can damage refining equipment, cause polluting vapour leaks, or is just not compatible with the specifications of the machinery.

There are fears that this could dampen demand for Canadian oil, or lead to lower prices. West coast American refineries were expected to be the top buyers of crude oil delivered through TMX, and they are unlikely to make major upgrades or changes to their equipment just to accommodate the Canadian oil. Therefore, there is now a lot of uncertainty over the pipeline's future (or at least its profitability).

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