Canadian oil producers have found a way to access the growing Asian energy market without the controversial Trans Mountain pipeline.
A cargo of heavy crude was sent to China after being railed to a terminal in Portland, Oregon, according to Bloomberg, citing US Census data and people with knowledge of the situation. The crude came from Alberta’s oil sands, the agency said.
The shipments happened as Kinder Morgan struggles to move forward with its Trans Mountain Pipeline expansion to the Vancouver area amid fierce opposition from British Columbia. The project, which would open up the Asian market to oil sands producers, was approved by the federal government in late 2016 but suffered a setback when the BC government proposed limiting any increase in shipments of diluted bitumen amid concerns about spills.
Census data showed that the January export out of Portland to China totaled 243,879 barrels of foreign crude. The oil was listed as having an API of under 25, indicating it was heavy oil, like the type produced in the Canadian oil sands.
Canadian oil producers are trying to diversify their customer base in hopes that having more buyers will improve the prices they receive for the crude. More than 98 percent of the country’s oil exports go to the US.
Heavy Canadian crude prices are trading near their biggest discount to West Texas Intermediate futures in almost four years. Pipelines are filled to capacity and exporters attempting to ship their crude via rail have also faced bottlenecks.