(Calgary) Suncor says it will undoubtedly benefit from the opening of the Trans Mountain pipeline, which runs from Alberta to coastal British Columbia.
The pipeline expansion will “clearly increase” the profitability of Suncor’s oil sands production, said Dave Oldreive, the company’s executive vice president responsible for refining, sales and marketing.
This will have a positive impact on the price Canadian oil shippers get for their products, when historically they have been at a disadvantage in part due to a lack of export capacity.
It will also allow for future production growth, both for Suncor and the oil sands sector as a whole, Oldreive said.
“We have been waiting for this for some time and we are excited to start shipping products via pipeline. It’s good for our industry, it’s good for Suncor,” he said during a conference call with analysts Wednesday, during which the company’s financial results were discussed at the first quarter.
The official opening of the Trans Mountain pipeline expansion took place last week. It gives Canadian oil shippers access to an additional 590,000 barrels per day of pipeline capacity.
According to figures provided by the Canada Energy Regulator, the Trans Mountain pipeline expansion is expected to increase Western Canada’s total crude oil export capacity by 13% once fully operational. Although officially open, the pipeline is gradually filling with crude and the first tanker is not expected to be loaded from the new line for export until the middle of the month.
Overall, the capacity of the Trans Mountain expansion will represent 17% of the total pipeline export capacity available to Canadian crude oil shippers, according to the Canada Energy Regulator.
Mr. Oldrieve expects crude oil loaded from the Trans Mountain pipeline onto tankers at the Westridge Marine Terminal in Burnaby, British Columbia, to be delivered primarily to California as well as Asian markets.
He said Suncor’s sales offices in Calgary, Houston and London are working to strengthen relationships with customers on the West Coast and Asia to take advantage of the opening of the Trans Mountain project.
Contracted oil shippers, including Suncor, are currently locked in an ongoing dispute with Trans Mountain over increasing fees the Crown corporation wants to charge them to move their products through the pipeline.
The start-up of Trans Mountain coincides with an increase in production from Western Canadian oil companies. In Alberta specifically, oil production reached a record level of 4.53 million barrels per day in December 2023, according to figures from the Canada Energy Regulator.
Suncor said in a news release after markets closed Tuesday that it earned $1.61 billion in the first three months of 2024, up from $2.05 billion a year earlier.
The company reported record upstream production of 835,000 barrels per day during the quarter, including record oil sands production of 785,000 barrels per day.
The company also said it achieved record refined product sales of 581,000 barrels per day and recorded its highest ever refinery throughput in the first quarter at 455,000 barrels per day, with overall refinery utilization of 98%.