Suncor Leases Aframax Vessels, Directly Sells Trans Mountain Crude
(Reuters) — Canada's Suncor Energy is leasing Aframax vessels in the Pacific and selling direct to customers, seeking to maximize profits on oil being shipped on the newly completed Trans Mountain pipeline expansion (TMX), the company said on Wednesday.
TMX, which began commercial operations last week, will ship an extra 590,000 barrels per day (bpd) from Alberta to Canada's Pacific coast and is expected to increase access to markets in Asia and the U.S. west coast.
RELATED: Energy Transfer Subsidiary Sunoco and NuStar Energy Merger Receives Green Light from Unitholders
The expansion opens up new trading opportunities for Canadian producers. Oil market participants are keenly watching where the barrels of mainly heavy sour crude will end up, as the new source of supply could disrupt oil flows into different regions of the world.
Calgary-based Suncor is a committed shipper on TMX and Canada's second-largest oil producer.
The company expects most crude will be sold in California, as well as markets in Asia, Dave Oldreive, Suncor's executive vice president of downstream said on a first quarter earnings call.
The company is also transacting directly with customers rather than selling through third-party commodity trading shops, he added.
"Our trading offices in Calgary, Houston and in London have been working to strengthen those relationships along the west coast and in Asia, which is where we expect the volumes to clear," Oldreive said.
"We've leased Aframax vessels that were operating in the Pacific, this gives us an advantage on shipping costs."
Suncor on Tuesday reported first-quarter profit that beat analysts' estimates, thanks to strong demand for refined products and record oil sands production.
The company's shares were last up 0.8% at C$54.23 on the Toronto Stock Exchange.
Related News
Related News
- Phillips 66 to Shut LA Oil Refinery, Ending Major Gasoline Output Amid Supply Concerns
- FERC Sides with Williams in Texas-Louisiana Pipeline Dispute with Energy Transfer
- U.S. Appeals Court Blocks Kinder Morgan’s Tennessee Pipeline Permits
- ConocoPhillips Eyes Sale of $1 Billion Permian Assets Amid Marathon Acquisition
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- U.S. Appeals Court Blocks Kinder Morgan’s Tennessee Pipeline Permits
- Malaysia’s Oil Exports to China Surge Amid Broader Import Decline
- U.S. LNG Export Growth Faces Uncertainty as Trump’s Tariff Proposal Looms, Analysts Say
- Marathon Oil to Lay Off Over 500 Texas Workers Ahead of ConocoPhillips Merger
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
Comments