Global commodity price reporting agency Argus today launched three new daily prices for heavy Canadian crude exported through the 590,000 b/d Trans Mountain Expansion (TMX) pipeline in western Canada.
The TMX pipeline became operational in May, making Canada a significant new source of heavy crude for Asian refiners and giving largely land-locked Alberta an important export outlet to Vancouver on the Pacific coast.
Canada produces around 5.35mn b/d of mainly heavy crude, the bulk of which is exported by pipeline to the US. TMX expands the Trans Mountain pipeline system's capacity to 890,000 b/d from around 300,000 b/d.
Price discovery for Canada's heavy crude is moving increasingly to the coasts, where it is traded on international markets. The Argus assessment for Western Canadian Select (WCS) at Houston on the US Gulf coast is the settlement basis for one of the largest financial markets for Canadian crude oil. Argus' new fob Vancouver and delivered to China assessments will increase physical price transparency at the Pacific coast, the other major outlet for waterborne exports from Canadian producers.
Argus chairman and chief executive Adrian Binks said: "After extensive consultation with market participants, we are pleased to launch assessments for TMX Canadian crude at Vancouver and delivered to China, which will provide important price transparency as heavy crude flows adapt to this newly accessible supply. Our new assessments are underpinned by our public methodologies and draw on the global expertise of Argus' crude and freight teams in Calgary, Beijing, Shanghai, Houston and Singapore."
The new assessments are for crude loaded from the TMX pipeline onto Aframax-sized (80,000t) tankers at Vancouver's Westridge docks.
The new prices are:
- Heavy, low-TAN (low acid) Cold Lake-type crude
- Heavy, high-TAN (high-acid) Access Western Blend (AWB)-type crude
- Heavy, high-TAN crude delivered at Zhejiang, China
- The prices are published daily in the Argus Crude and Argus Americas Crude reports.
Argus also publishes freight rates from Vancouver that illuminate these new trade flows. They cover Vancouver to China Aframax routes as well as Vancouver to US west coast shipments, where crude on smaller Aframax vessels can be transshipped to very large crude carriers (VLCCs) for moving in bulk to China. These freight rates are published daily in Argus Tanker Freight:
- Vancouver to US west coast 80,000t (Aframax)
- Vancouver to China 80,000t (Aframax)
- US west coast to China 270,000t (VLCC)
- US west coast ship-to-ship (STS) transfer cost
