First import of Western Canadian crude since Aug 2015 arrives: In the LOOP

The Louisiana Offshore Oil Port last week received a cargo of Western Canadian crude, the heavy sour grade Access Western Blend, which appears to be the oil terminal's first import from that region in recent history.

Marathon imported last week about 579,000 barrels of 24.1 API Access Western Blend on the 109,000 mt Aframax tanker Seavoyager, which originally sailed from Vancouver, according to US Customs and Platts Analytics data.

Cenovus was listed as the shipper. It departed Vancouver on April 19, moved along the Pacific Coast of North America before transiting the Panama Canal around May 5-6 and arriving at LOOP around May 11, according to Platts vessel-tracking software cFlow.

LOOP has not previously imported any Western Canadian crude by water, having only before seen Eastern Canadian grades Hibernia, Terra Nova and Hebron, according to data dating back to August 2015. Most market sources seemed to think this may have been LOOP's first import of Western Canadian crude by any means; however, there is not the same level of visibility into pipeline shipments of crude as there is for waterborne movements.

"[Western Canadian Select] has made it to LOOP via vessel in the past but nothing on the pipeline," said one source who is familiar with LOOP operations.

Other sources were in agreement that the only pipeline option would be Shell Midstream's Houston-to-Houma, Louisiana, Zydeco crude pipeline, but that pipeline handles light sweet grades and not heavy sours.

US Customs and Platts Analytics data shows just four US waterborne imports of AWB. In addition to the LOOP import last week, there were roughly Aframax-sized imports in October at Texas City, Texas, and February and April at Long Beach, California.

LOOP did not respond to a request for comment.

Access Western Blend is typically 21.8 API, 3.9% sulfur with high metals, according to Crude Quality Inc., which maintains the Western Canadian online crude data bank www.crudemonitor.ca. It is a blend of bitumen and diluent, according to co-producer MEG Energy. Market sources say it is typically valued anywhere from $2.40/b to $1.90/b less than regional heavy sour benchmark Western Canadian Select. Like WCS, it arrives in the Houston refining center by pipeline. AWB has been exported out of the US Gulf Coast. In late October, Lukoil shipped 22.2 API, 3.81% sulfur AWB from Port Arthur, Texas, to Shandong, China,-based Haiyou Petrochemical.

Hedging is a complicating factor, with no established US Gulf Coast marker for medium or heavy sour crudes, even though most regional refiners maintain a steady diet of these crudes.

The 'In the LOOP' Americas crude oil wrap runs each Monday in Crude Oil Marketwire, North American Crude and Products Scan and on the Platts Global Alert. You can read the FAQ: USGC LOOP Sour crude here and find the full special report LOOP Sour Crude: A benchmark for the future here. Also be sure to download our LOOP app by searching for 'Platts LOOP' in your app store.