Asia’s crude oil imports from Canada’s newly expanded Trans Mountain pipeline are set to increase in September as major refiners in Japan, South Korea, and a refinery in Brunei have secured their first cargoes alongside China, according to Reuters.
This surge follows the commencement of exports from the expanded TMX pipeline in May, which has tripled the flow of crude from landlocked Alberta to Canada’s Pacific coast, reaching 890,000 barrels per day (bpd).
The Canadian government-owned pipeline enhances Canadian producers’ access to U.S. West Coast and Asian markets, providing Asian refiners an opportunity to diversify their imports.
Chevron will split a Cold Lake crude cargo between its South Korean joint venture refiner GS Caltex and Japan’s top refiner ENEOS, according to traders.
Additionally, South Korea’s top refiner SK Energy, a unit of SK Innovation, bought a cargo from Unipec, and Hengyi Petrochemical, a refinery operator in Brunei, purchased a cargo from PetroChina.
These cargoes, each amounting to 550,000 barrels, will be delivered in September and were sold at discounts ranging from $5 to $6 per barrel to ICE Brent.
Meanwhile, Chinese private refiner Rongsheng Petrochemical TMX cargoes from ConocoPhillips and Vitol which are to be delivered by September.
“Canada’s TMX crude attracts interest from Asian buyers who are keen to secure cheap supplies of heavy grades but do not have access to U.S.-sanctioned Venezuelan crude,” said Muyu Xu, a senior crude oil analyst at analytics firm Kpler.
Xu added that it would take time for refiners to experiment with and test TMX crude as the first few cargoes have just arrived.
TMX crude exports, expected at about 350,000 to 400,000 bpd, will primarily compete with heavy grades from Latin America and the Middle East.
Cold Lake is about $10 per barrel cheaper than Iraq’s Basra Heavy for deliveries to China.
In June, TMX crude exports were at 343,000 bpd, with 187,000 bpd destined for China, 60,000 bpd for India, and the remainder for U.S. West Coast refineries.
