PetroChina Canada is no longer a shipper on the 590,000 b/d Trans Mountain Expansion (TMX) crude pipeline, less than six months after Canada's newest pipeline went into service.
The Chinese-owned refiner has parted with its commitment on the pipeline connecting Edmonton, Alberta, to Burnaby, British Columbia, according to a letter to the Canada Energy Regulator on 10 October. The project has helped Canadian crude producers reach new markets on the Pacific Rim, with China often singled out as a target.
PetroChina Canada "has now assigned these agreements to another party and will not be a committed shipper going forward," the letter read, without disclosing the other company or reasoning.
TMX roughly tripled the capacity of the Trans Mountain system to 890,000 b/d when it went into service on 1 May, but critics questioned how useful the expansion would be. Shippers were quick to dispel any concerns about the line's utilization by ramping up throughputs in the first few months of service. The latest official figures from Trans Mountain show 704,000 b/d was shipped in June, its first full month of operation.
However, the expansion was riddled with construction delays and of concern is who will ultimately foot the bill for the C$35bn ($25bn) project's cost overruns — Trans Mountain or shippers through higher tolls.
The original budget for the project was C$5.5bn when first conceived more than a decade ago with many of the shippers signing up for capacity around that time.
The tolling dispute will continue into 2025 to determine what portion of the extra costs the shippers will be responsible for, with the regulator responsible for making the final decision. Interim tolls in place have the fixed costs for a heavy crude shipper with a 20-year term to move 75,000 b/d or more at about C$9.54/bl ($6.96/bl).
"Shippers should not reasonably be expected to be subject to C$7.4bn (and counting) in cost growth without serious scrutiny of Trans Mountain's costs," lawyers in March this year told the CER on behalf of several shippers, including PetroChina.
Trans Mountain says approximately 80pc of the TMX is backed by firm commitments with the balance saved for walk-up shippers.
PetroChina Canada owns the MacKay River oil sands project in northeast Alberta which has produced about 10,000 b/d of bitumen from January to August this year, according to data from the Alberta Energy Regulator (AER).
PetroChina Canada also owns the undeveloped Dover oil sands project, has a 50pc stake in the Grand Rapids oil sands pipeline, natural gas production in western Canada and a 15pc stake in the 14mn t/yr LNG Canada export facility.
