Trans Mountain's expanded oil pipeline system will start commercial operations on May 1, the Canadian government-owned company said late on April 3, surprising analysts with an earlier-than-expected commencement on the long-delayed CA$34-billion (US$25.2 billion) project.
Trans Mountain previously said startup would happen in the second quarter.
Canada is the fourth-largest oil producer but output has been capped by full pipelines. Expanding Trans Mountain will increase shipments from the British Columbia coast to Asia and the U.S. West Coast.
The expansion will nearly triple the flow of crude from Alberta to Canada's Pacific Coast to 890,000 bbl/d.
Volumes will increase gradually. The pipeline will be highly utilized as early as next year and run full in 2025-26, Trans Mountain said in March.
May 1 is ambitious considering Trans Mountain needs to complete line fill and receive regulatory approvals, said Dylan White, North American crude analyst for Wood Mackenzie, adding that late May or early June is more realistic.
"Pretty well everyone with whom I’ve spoken regarding start-up was anticipating June 1," said Commodity Context analyst Rory Johnston on X.
"It takes away the (price) volatility we've seen in the recent past because of egress capacity being tight," said Eight Capital analyst Phil Skolnick.
Trans Mountain ran into numerous problems during construction, most recently installing pipe in hard rock in British Columbia.
The expanded pipeline raises competition with Enbridge's Mainline and TC Energy's Keystone pipeline, which take Canadian crude to U.S. refineries.
Enbridge expects Trans Mountain's impact on its volumes to be modest.
Recommended Reading
Remotely Controlled Well Completion Carried Out at SNEPCo’s Bonga Field
2024-02-27 - Optime Subsea, which supplied the operation’s remotely operated controls system, says its technology reduces equipment from transportation lists and reduces operation time.
E&P Highlights: Feb. 26, 2024
2024-02-26 - Here’s a roundup of the latest E&P headlines, including interest in some projects changing hands and new contract awards.
E&P Highlights: March 15, 2024
2024-03-15 - Here’s a roundup of the latest E&P headlines, including a new discovery and offshore contract awards.
Santos’ Pikka Phase 1 in Alaska to Deliver First Oil by 2026
2024-04-18 - Australia's Santos expects first oil to flow from the 80,000 bbl/d Pikka Phase 1 project in Alaska by 2026, diversifying Santos' portfolio and reducing geographic concentration risk.
Deepwater Roundup 2024: Offshore Australasia, Surrounding Areas
2024-04-09 - Projects in Australia and Asia are progressing in part two of Hart Energy's 2024 Deepwater Roundup. Deepwater projects in Vietnam and Australia look to yield high reserves, while a project offshore Malaysia looks to will be developed by an solar panel powered FPSO.