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Trans Mountain Pipeline restarted after three weeks offline

Highlights

Longest Trans Mountain closure in 70-year history

Crude supplies reopened to Vancouver region, Pacific Northwest

The Trans Mountain crude oil and products pipeline in Western Canada restarted Dec. 5 after a three-week shutdown from record rainfall that triggered severe flooding and landslides in British Columbia, resulting in the longest closure in the pipeline's nearly 70-year history.

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The 330,000 b/d pipeline, which transports more than 300,000 b/d of crude and roughly 25,000 b/d of refined products, is again supplying oil to the Vancouver region and to refineries in the US Pacific Northwest, Trans Mountain said.

The plan originally was to resume partial service by Nov. 26, but Trans Mountain officials said the outage would last until earlier December because of necessary repairs and additional inclement weather. The combination of the pipeline closure and since-resolved rail shutdowns has caused oil and fuel shortages in parts of British Columbia, especially in the Victoria area. The pipeline was shuttered on Nov. 14.

"The Trans Mountain Pipeline was safely restarted today," Trans Mountain said in a Dec. 5 statement. "As part of this process, Trans Mountain will monitor the line on the ground, by air and through our technology systems operated by our control center. The restart comes following the completion of all necessary assessments, repairs and construction of protective earthworks needed for the pipeline to be returned to service.

"Over the coming weeks, Trans Mountain will continue with additional emergency work," Trans Mountain noted. "Some of this work includes conducting additional inline inspection, armoring of riverbanks and adding ground cover or relocating sections of the pipeline."

The pipeline system never had any serious damage, Trans Mountain said. Detailed investigations of the pipe's integrity and geotechnical assessments of the surrounding landscape were completed to confirm readiness to restart the line. Restarting the pipeline required a significant effort to reinstate access lost due to damaged roads, changes in river flows and adverse weather. Crews worked around the clock to clear highways, build bridges and manage watercourses to allow for access and repairs to the pipeline, Trans Mountain said.

Prior to the restart, Trans Mountain had utilized its connected Puget Sound Pipeline across the border in Washington to move some crude oil held in tanks at Trans Mountain's Laurel Station in Washington to BP's nearby Cherry Point Refinery for processing.

Total combined flows through Trans Mountain have averaged 326,000 b/d in the first half of 2021, of which 302,000 b/d was crude and 24,000 b/d was refined products, according to Parker Fawcett, analyst with S&P Global Platts Analytics. Roughly 90% of the crude transported is light crude, of which 58,000 b/d has been used for local refining while 214,000 b/d is exported to refineries primarily in Washington.

The five refineries in Washington have total crude processing capacity of 651,700 b/d, according to Energy Information Administration data. Western Canada is a key crude supplier to the region which imported 4.47 million barrels of medium sour and 1.6 million barrels of light sweet crude in July 2021, according to EIA data. The pipeline shutdown created crude supply gaps for the Washington refineries. Roughly 90% or about 214,000 b/d of the crude transported on the 330,000 b/d pipeline is exported to their five plants.

Some progress was made more than a week earlier when Canadian Pacific and Canadian National railways restored services to the corridor between Kamloops and Vancouver, resuming shipments of grain, fuel, coal and more.

Prompt prices for November barrels of Western Canadian crudes previously were heard offered at steep discounts to the WTI benchmark as traders searched for alternative outlets amid the shutdown of the Trans Mountain pipeline. The pipeline outage has widened Western Canadian crude price discounts. Prompt prices for crude can often reflect real-time market disruptions as traders look to either store or find new buyers for crude that was destined to be transported by a pipeline that has been shut.