TMX crude pipeline likely to start 'later' in 1Q

Market: Crude oil, Pipe and tube
22/08/23

The 590,000 b/d Trans Mountain Expansion (TMX) crude pipeline in western Canada will likely start commercial service "later" in the first quarter next year as it enters the final stages of the C$30.9bn ($22.8bn) project.

Shippers are at most seven months away from using the federally owned pipeline project, according to Trans Mountain last week in response to information requests from the Canada Energy Regulator (CER). The regulator is guiding both Trans Mountain and shippers toward a hearing, but first asking parties to elaborate on their positions relating to both line fill and tolls.

A specific in-service date still appears premature for the massive project that will connect oil producers in Alberta to an export terminal in British Columbia, but it is a sign of relative certainty for the pipeline that has been marred by construction and legal challenges, culminating in repeated delays and cost overruns since it was first proposed in 2013.

But as construction of the line and upgrades at terminals near completion, the operator is focusing on the commissioning process which involves making a call for physical crude to act as line fill, and working with the regulator to approve the tolls it will charge shippers.

A decision on tolls by the regulator at least 60 days in advance of the in-service date would be "sufficient" enough to avoid a delay in the pipeline's commissioning, according to Trans Mountain, but it indicated earlier in the fourth quarter as initially requested in June would be ideal.

Trans Mountain is still planning for the possibility of putting the expansion into commercial service in January, contingent on putting the final touches on construction, which means the expansion would need to have line fill completed in advance of the first round of monthly nominations which would be due on 13 December.

The line fill process would take about seven weeks, meaning nominating crude would need to occur by 15 September so Trans Mountain could take custody of the volumes starting in October.

The existing 300,000 b/d Trans Mountain line will assist with the wet commissioning of TMX by moving some volumes to expansion-related facilities, temporarily reducing throughputs on its own line.

Higher tolls reflect delays

Tolls filed were opposed by oil companies and refineries, prompting the regulator to request more information from Trans Mountain on the rising costs. Some construction costs ballooned fourfold since 2017 estimates, the regulator noted, which Trans Mountain attributed to multiple "start and stops" because of a lengthy provincial permitting process in British Columbia and the need for more consultation following the Federal Court of Appeal quashing the expansion in 2018.

Trans Mountain also indicated an "abundance" of resources was available for construction had TMX stayed on its initial schedule, but large projects in British Columbia like the Site C hydroelectric project and TC Energy's Coastal GasLink ramped up, making competition for labor fierce. Wildfires, flooding and multiplying land values were also among the contributing factors in over the past six years.

Trans Mountain said it will be responsible for 69pc of the C$23.5bn cost increase since 2017, with the remaining 31pc passed on to shippers in the form of higher tolls.

By Brett Holmes

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05/11/24

Voting set to conclude in race for White House

Washington, 5 November (Argus) — Voting concludes today in the US presidential contest between former president Donald Trump and vice president Kamala Harris, a race with high stakes for energy policy, trade and climate change. Polls will close by 6-9pm ET in eastern states and by 11 pm ET in most western states, but election officials say it will take time to count votes, including from mail-in ballots that will trickle in over the coming days. As of 3 November, voters who went to the polling stations early or sent mail-in ballots added up to 48pc of the total turnout in 2020, according to analysis by the Washington Post. The presidential race is likely to be determined by voters in Michigan, Wisconsin, Pennsylvania, North Carolina, Georgia, Arizona and Nevada, where pre-election polls have shown no decisive lead for Harris or Trump. Voters are casting ballots at a time when domestic oil and gas production is booming. US crude output reached a record high 13mn b/d last year, while gas production hit a record 103 Bcf/d, according to the US Energy Information Administration. Despite record production and profits in the oil industry, Trump has focused heavily on energy policy — and voter anger over higher prices across the economy — in his bid to win a second term. US drivers paid an average of $3.07/USG for regular grade gasoline in the week ended on 4 November, the lowest price in 10 months — but still higher than at any point during Trump's first presidency. On the campaign trail, Trump has assured oil and gas producers that under his watch they would be permitted to "drill, baby, drill" and has promised to dismantle the energy tax credits in President Joe Biden's signature climate initiative, the Inflation Reduction Act. Harris has committed to support the 2022 law and other energy policies adopted by Biden, including continued support for electric vehicles. Harris has disavowed her 2019 pledge to ban hydraulic fracturing. But oil and gas firms remain concerned about restrictions on federal leasing and efforts to electrify the vehicle fleet if she is elected. The next president will decide key questions on energy policy, such as how to proceed with a "pause" on the licensing of new US LNG export facilities and to manage climate-related rules for power plants, oil and gas facilities and vehicles. The race for the White House will have equally high stakes for companies involved in metals and agriculture , as well as other commodities. Trump is planning a combative approach to trade, with a 20pc tariff on all foreign imports and even higher tariffs against China, and to rescind many regulations. In 2025, the US Congress is poised for a major fight on tax policy because of the year-end expiration of an estimated $4 trillion in tax cuts. Russia's war on Ukraine, and the future of US restrictions on Russian energy exports is also at stake during the election. Trump has vowed to end the war by forcing Kyiv to negotiate a deal with Russian president Vladimir Putin and appears to back the Kremlin's argument that the continuation of US sanctions on Russia would weaken and undermine the dollar. A Harris administration would continue enforcing the G7 price cap on Russian oil exports and, possibly, add to the restrictions on Moscow's earnings from its oil and gas exports. The growing threat of an Israel-Iran war and its potential impacts on oil flows from the Middle East is threatening to overwhelm the final months of Biden's term in office and any foreign policy initiatives either candidate vying to succeed him will pursue in the region. US-China relations are likely to remain adversarial in coming years. Viewing Beijing as the principal economic and geopolitical challenge for the US is a rare overlap in foreign policy priorities identified by Trump and Harris. Of particular concern in Washington is the ability of oil exporting countries such as Iran, Venezuela and Russia to find willing buyers for their crude in China despite US sanctions. Polls also show a tight race in the fight for control of the US House of Representatives, where Republicans hold a slim 220-212 majority. Up to 22 congressional races are up to grabs, with a range of potential outcomes favoring either party, election ratings firm Cook Political Report says. Cook rates 208 seats as solid or leaning Republican, and 205 solid or leaning Democratic, with both shy of the 218 needed for control of the chamber. In the US Senate, where Democrats hold a 51-49 majority, Republicans have a clear path to taking control because of polling leads in West Virginia and Montana. Republicans could win control of the Senate by flipping just one seat, if Trump wins the election, but would need to flip two seats if Harris wins. By Chris Knight and Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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04/11/24

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04/11/24

US railroad-labor contract talks heat up

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Canada advances oil and gas GHG cap

04/11/24

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04/11/24

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04/11/24

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04/11/24

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04/11/24

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04/11/24

Oil use still flat to 2030 in TotalEnergies scenarios

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