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
Permian E&P Midway Energy Partners Secures Backing from Post Oak
2024-02-09 - Midway Energy Partners will look to acquire and exploit opportunities in the Permian Basin with backing from Post Oak Energy Capital.
Texas Pacific Land Approves Three-for-one Stock Split
2024-03-10 - Each stockholder of record as of March 18 will be distributed two shares for each share owned.
Diamondback Stockholders All in for $26B Endeavor Deal
2024-04-29 - Diamondback Energy shareholders have approved the $26 billion merger with Endeavor Energy Resources.
Uinta Basin: 50% More Oil for Twice the Proppant
2024-03-06 - The higher-intensity completions are costing an average of 35% fewer dollars spent per barrel of oil equivalent of output, Crescent Energy told investors and analysts on March 5.
Enbridge Advances Expansion of Permian’s Gray Oak Pipeline
2024-02-13 - In its fourth-quarter earnings call, Enbridge also said the Mainline pipeline system tolling agreement is awaiting regulatory approval from a Canadian regulatory agency.