The Trans Mountain crude oil and products pipeline in Western Canada likely will remain closed for another week after record rainfall triggered severe flooding and landslides in British Columbia, resulting in the longest shutdown in the pipeline's nearly 70-year history, officials said Nov. 19.
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The combination of the 300,000 b/d of oil equivalent pipeline closure -- as well as rail shutdowns from both Canadian Pacific and Canadian National railways -- is causing oil and fuel shortages in parts of British Columbia, especially in the Victoria area. The Trans Mountain Pipeline was shuttered on Nov. 14.
In a late Nov. 19 statement, Trans Mountain said teams are beginning helicopter operations in the Coldwater River region of British Columbia to remove fallen trees and debris that are hampering detailed inspection of the pipeline.
"There are multiple areas of the pipeline between Hope and Merritt where pipeline cover needs to be restored and there are other sections that we may decide to cut-out and replace entirely, for example long sections that have been fully exposed to river course changes," Trans Mountain said. "As a precaution, Trans Mountain is deploying spill-response equipment trailers to areas where we will be working.
"If all planning and work continues to progress and no further issues with the pipeline are assessed, Trans Mountain is optimistic that we can restart the pipeline, in some capacity, by the end of next week," the statement continued. "Key to successful execution of the restart plan will be access for equipment, fair weather, and no new findings of concern."
Patrick De Haan, petroleum analyst for GasBuddy.com, said Nov. 19 that Victoria, for instance, had gasoline outages at roughly 70% of its fueling stations. Authorities were urging residents not to buy gasoline unless it was necessary.
Likewise, Canadian Pacific said it hopes to restore rail service by mid-week next week to the corridor between Kamloops and Vancouver.
"Progress is being made with approximately 20 separate sections of track across this region already cleared or repaired," CP said Nov. 19. "Work will continue through the weekend and, barring any unforeseen issues, we currently estimate service will be restored mid-week."
Rail outages have prevented most export cargoes of coal, wheat, potash, sulfur and other products from reaching dry bulk and container terminals on the Pacific Coast.
British Columbia declared a state of emergency on Nov. 17 and Canada has deployed troops to help evacuate cities and towns in southern British Columbia to Vancouver.
Prompt prices for November barrels of Western Canadian crudes were heard offered at steep discounts to the WTI benchmark on Nov. 19 as traders searched for alternative outlets amid the shutdown of the Trans Mountain pipeline.
Mixed Sweet crude in Edmonton, Alberta, was heard offered for November at an $11/b discount to the WTI calendar month average. Mixed Sweet's 30-day rolling average differential to WTI CMA is minus $2.87/b, according to S&P Global Platts data. Western Canadian Select in Hardisty, Alberta, for November was heard offered at WTI CMA minus $24.25/b. WCS Hardisty has averaged a discount of $16.63/b over the past 30 days.
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.