Alberta
Start-up of Trans Mountain expansion ‘going very well’ as global buyers ink deals for Canadian crude
A worker at Trans Mountain’s Burnaby Terminal. Photo courtesy Trans Mountain Corporation
From the Canadian Energy Centre
Chinese refiner pays about US$10 more for oil off TMX compared to sales value in Alberta
Canada’s oil sands producers are “back in the limelight” for investors following completion of the Trans Mountain pipeline expansion, according to a report by Enervus Intelligence Research.
For the first time in the better part of a decade, there is now breathing room on the system to ship all of the oil producers are able to sell off the coast of B.C.
Up until this May, Trans Mountain was regularly overbooked. Not anymore.
The crude carrier Dubai Angel picked up the first shipment from the long-awaited expansion on May 22, setting sail for China and a customer of oil sands producer Suncor Energy.
Analysts estimate Trans Mountain loaded 20 vessels in June, compared to a pre-expansion average of five per month.
“You’re seeing multiple buyers. It’s going very well,” said Phil Skolnick, managing director of research with New York-based Eight Capital.
“You’re seeing the exact buyers that we always thought were going to show up, the U.S. west coast refineries and as well as the Asian refineries, and there was a shipment that went to India as well.”
The “Golden Weld” in April 2024 marked the mechanical completion and end of construction for the Trans Mountain expansion project. Photo courtesy Trans Mountain Corporation
Canadian crude in demand on the global market
Asian markets – particularly China, where refineries can process “substantial quantities” of extra heavy crude and bitumen – are now “opened in earnest” to Canadian oil, the International Energy Agency (IEA) said in its June Oil 2024 report.
“There’s demand for this crude and people are going to make deals,” said Kevin Birn, chief analyst of Canadian oil markets with S&P Global.
The IEA said Canadian crude will increasingly compete with heavy oil from other countries, particularly those in Latin America and the Middle East.
June’s loading of 20 vessels is slightly lower than the 22 vessels Trans Mountain had targeted, but Skolnick said a few bumps in the project’s ramp-up are to be expected.
“About three months ago, the shippers were telling investors on their calls, don’t expect it to be a smooth ramp up, it’s going to be a bit bumpy, but I think they’re expecting by Q4 you should start seeing everyone at peak rates,” Skolnick said.
Delivering higher prices
Trans Mountain’s expanded Westridge Terminal at Burnaby, B.C. now has capacity to load 34 so-called “Aframax” vessels each month.
One of the first deals, with Chinese refiner Rongsheng Petrochemical, indicates the Trans Mountain expansion is delivering on one of its expected benefits – higher prices for Canadian oil.
Canada’s Parliamentary Budget Office has said that an increase of US$5 per barrel for Canadian heavy oil over one year would add $6 billion to Canada’s economy.
The June deal between Rongsheng and an unnamed oil sands shipper saw a shipment of Access Western Blend (AWB) purchased for approximately US$6 per barrel below the Brent global oil benchmark. That implies an AWB selling price of approximately US$75 per barrel, or about US$10 more than the price received for AWB in Alberta.
Expanded export capacity at the Trans Mountain Westridge Terminal. Photo courtesy Trans Mountain Corporation
More pipeline capacity needed
Oil sands production – currently about 3.4 million barrels per day – is projected to rise to 3.8 million barrels per day by the end of the decade before declining slightly to about 3.6 million barrels per day in 2035, according to the latest outlook by S&P Global.
“Despite the recent completion of the Trans Mountain Expansion project, additional capacity will still be needed, likely via expansion or optimization of the existing pipeline system,” wrote Birn and S&P senior research analyst Celina Hwang in May.
“By 2026, we forecast the need for further export capacity to ensure that the system remains balanced on pipeline economics.”
Uncertainty over the federal government’s proposed oil and gas emissions cap “adds hesitation” to companies considering large-scale production growth, wrote Birn and Hwang.
Global oil demand rising
World oil demand, which according to the IEA reached a record 103 million barrels per day in 2023, is projected to continue rising despite increased investment in renewable and alternative energy.
A June outlook by the International Energy Forum (IEF) pegs 2030 oil demand at nearly 110 million barrels per day.
“More investment in new oil and gas supply is needed to meet growing demand and maintain energy market stability, which is the foundation of global economic and social well-being,” said IEF secretary Joseph McMonigle.
Your province, your plate
For the first time in more than 40 years, Alberta is refreshing its licence plate with a Strong and Free motto, and the final look will be decided by Albertans.
From Oct. 15 until Nov. 5, Albertans can take part in a tournament-style online vote for a new provincial licence plate design that proudly reflects who we are every time we hit the road.
The new licence plate will be available in late 2026 and will be based on a “Strong and Free” theme, echoing the Latin motto of our province and reflecting Alberta’s bold identity, economic strength and deep-rooted provincial pride. The motto’s inclusion on the licence plates will also serve as a nod to Canada’s national anthem and Alberta’s position as a strong and sovereign province within a united Canada.
“From our wide-open landscapes to our entrepreneurial spirit, Alberta has so much to be proud of, and our new licence plate will reflect that pride. For the first time in four decades, Albertans will choose how we tell that story. I look forward to seeing which design is selected to show the world that this is the land of the strong and free.”
With options that include famous Alberta landmarks such as the Three Sisters Mountains, and long-standing symbols of our province’s core industries including agriculture and energy production, the potential plates each contain symbols of Alberta’s beauty, history and spirit.
In the first phase of voting, Albertans can vote for their favourite of eight unique concepts that incorporate Alberta’s unique landscape and history. Following the first phase, four designs will advance to the next round of voting where the top two will be selected, and subsequently, there will be a final vote for the winning plate concept. The winning new licence plate will be announced during the fall session of the legislature.
“Alberta is strong and free, and Albertans will have the opportunity to choose a new licence plate that captures that spirit. The new licence plate will be a fresh design that every Albertan will be proud to show off, whether they’re driving to work, heading to the lake or exploring North America.”
If an Albertan wants to replace their current plate for the new licence plate once it is released, they can voluntarily pay a $28 fee. Alternatively, Albertans could obtain a new plate on their vehicle registration renewal date at no additional cost. Motorists may also continue using the previous licence plate once the new licence plate is brought onboard, provided it is still in good condition.
Quick facts
- Alberta’s current licence plate was designed in 1984.
- In 2021, Alberta began a transition from painted to reflective plates with the same design.
- The new designs each incorporate reflective technology to improve readability for law enforcement and automated systems in low-light conditions, and also meet international standards for visibility, legibility and counterfeit resistance.
Related information
Licence plate designs. Click link above to vote
Enbridge CEO Greg Ebel. The company’s extensive pipeline network transports about 30 per cent of the oil produced in North America and nearly 20 per cent of the natural gas consumed in the United States. Photo courtesy Enbridge
From the Canadian Energy Centre
B.C. tanker ban an example of federal rules that have to change
The CEO of North America’s largest pipeline operator says Alberta’s move to champion a new oil pipeline to B.C.’s north coast makes sense.
“There’s a good reason the Alberta government has become proponent of a pipeline to the north coast of B.C.,” Enbridge CEO Greg Ebel told the Empire Club of Canada in Toronto the day after Alberta’s announcement.
“The previous [federal] government’s tanker ban effectively makes that export pipeline illegal. No company would build a pipeline to nowhere.”
It’s a big lost opportunity. With short shipping times to Asia, where oil demand is growing, ports on B.C.’s north coast offer a strong business case for Canadian exports. But only if tankers are allowed.
A new pipeline could generate economic benefits across Canada and, under Alberta’s plan, drive economic reconciliation with Indigenous communities.
Ebel said the tanker ban is an example of how policies have to change to allow Canada to maximize its economic potential.
Repealing the legislation is at the top of the list of needed changes Ebel and 94 other energy CEOs sent in a letter to Prime Minister Mark Carney in mid-September.
The federal government’s commitment to the tanker ban under former Prime Minister Justin Trudeau was a key factor in the cancellation of Enbridge’s Northern Gateway pipeline.
That project was originally targeted to go into service around 2016, with capacity to ship 525,000 barrels per day of Canadian oil to Asia.
“We have tried to build nation-building pipelines, and we have the scars to prove it. Five hundred million scars, to be quite honest,” Ebel said, referencing investment the company and its shareholders made advancing the project.
“Those are pensioners and retail investors and employees that took on that risk, and it was difficult,” he said.
For an industry proponent to step up to lead a new Canadian oil export pipeline, it would likely require “overwhelming government support and regulatory overhaul,” BMO Capital Markets said earlier this year.
Energy companies want to build in Canada, Ebel said.
“The energy sector is ready to invest, ready to partner, partner with Indigenous nations and deliver for the country,” he said.
“None of us is calling for weaker environmental oversight. Instead, we are urging government to adopt smarter, clearer, faster processes so that we can attract investment, take risks and build for tomorrow.”
This is the time for Canadians “to remind ourselves we should be the best at this,” Ebel said.
“We should lead the way and show the world how it’s done: wisely, responsibly, efficiently and effectively.”
With input from a technical advisory group that includes pipeline leaders and Indigenous relations experts, Alberta will undertake pre-feasibility work to identify the pipeline’s potential route and size, estimate costs, and begin early Indigenous engagement and partnership efforts.
The province aims to submit an application to the Federal Major Projects Office by spring 2026.
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