The Trans Mountain oil pipeline system is expected to operate at full capacity in April and into May as a result of energy disruptions caused by the war in the Middle East.
The pair of pipelines transport oil from Edmonton to a terminal in Burnaby, B.C.
Typically, the majority of the exported oil is destined for China and other Asian countries, which now have a growing appetite for energy as global supplies are constrained by the conflict.
A full pipeline system would represent a milestone that Trans Mountain was only expecting to reach in a few years. The pipeline was operating between 80 and 90 per cent capacity 12 months ago.
“The system’s basically full,” said Trans Mountain chief executive Mark Maki.
Energy prices have soared over the last month as Iran has restricted access to the Strait of Hormuz, the geographic choke point through which 20 per cent of the world’s oil is exported, in addition to natural gas and other products.
“The conflict takes a little while for the market to absorb,” Maki said in an interview with CBC News on the sidelines of the CERAWeek energy conference in Houston. “So, what we’re starting to see now is a shift to North America as a source.”
Asian customers are “highly interested in Canadian barrels, full stop. They like the country, they like the product that comes to them,” he said.
Should the conflict in the Middle East end, experts say it could take several months for energy markets to normalize. Asian countries have been the most affected by the energy crisis, with some countries already experiencing oil and natural gas shortages.
On Tuesday, Shell chief executive Wael Sawan warned Europe will soon begin to experience the same kind of disruption to fuel supplies that Asia has faced.
Meanwhile, Trans Mountain is moving ahead with a pair of expansion projects to transport more oil through the existing pipeline system.
The first increase would result from using drag reducing agents with the goal of moving up to 10 per cent more oil. The project would cost $9 million, and construction is expected to begin this August and be complete in January 2027.
The second expansion would be more complex and involve the construction of more pumping stations. The original timeline was to complete the project by 2029, but Maki said the Crown corporation is already ordering equipment with an aim of finishing the expansion in 2028.
The expansion is expected to increase capacity by an additional 360,000 barrels per day, although it still requires regulatory approval.
The twin pipeline system can currently transport approximately 890,000 barrels per day between Alberta and the West Coast.
