TMX oil specs inappropriate: Valero, Chevron

Crude quality specifications on the Trans Mountain Expansion (TMX) pipeline in western Canada are not narrow enough and may prevent buyers in California from taking crude shipped on the recently commissioned system, according to two US refiners.

The 590,000 b/d TMX pipeline was placed into service on 1 May, a welcome addition for both producers in Alberta and refiners on the Pacific rim, but the upper limits allowed for crude on the line relating to vapor pressure and Total Acid Number (TAN) are problematic, Chevron and Valero said in letters to the Canada Energy Regulator (CER) on 10 May.

The specifications, as set out by Trans Mountain's rules and regulations, were already in place for the original 300,000 b/d crude pipeline, or Line 1, which also carries refined products that require a higher vapor pressure. TMX, or Line 2, will primarily cater to heavy crude shippers.

But the vapor pressure limit of 103 kPa at 37.8°C on the new line is nearly 40pc higher than tanks allow, according to Valero.

"High vapor pressure crude oil simply cannot be accepted in United States internal floating roof tanks," wrote Valero. The current limits are "wholly inappropriate" and will result in crude being transported through TMX that is not suitable for the west coast market.

Chevron concurred that the specifications exceed the limit for storage tanks at its own California refineries in Richmond and El Segundo.

"Failure to amend the TAN specification and vapor limits for TMPL may prevent Chevron from purchasing or processing crude from [Trans Mountain] for our California refineries," the company wrote.

The letters were in support of a 12 April complaint by Canadian Natural Resources (CNRL) to the CER, requesting the regulator intervene. Fellow oil sands producers Suncor, Imperial Oil, MEG Energy and ConocoPhillips also wrote in support, as did industry groups Explorers and Producers Association of Canada (EPAC) and Western States Petroleum Association (WSPA).

Current rules state crudes must have a TAN of less than 1.3mg KOH/g to be considered a Low TAN Dilbit, but that is "inappropriately high," according to CNRL, and should be brought down to the same 1.1mg KOH/g threshold set by other export pipelines.

Cenovus and Plains Midstream wrote that the CER did not need to intervene as this was a commercial matter.

"This is effectively a commercial dispute that should be dealt with between the sophisticated commercial entities involved," said Plains.

By Brett Holmes