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Trans Mountain Canada plans to open the season for capacity expansion later this year

Mark Maki, the CEO of Canada's Trans Mountain Oil Pipeline, said that the operator may begin a formal process to gauge commercial interest this year in the first project of several potential ones to increase the capacity of the system.

This process, called an "open-season," will determine if there is sufficient interest from shippers to introduce chemical additives which reduce friction in pipelines, allowing increased flow.

Maki stated that adding these drag-reducing compounds could increase daily delivery volumes of the 890,000.00 barrels per day pipe by 5% to a 10%. The capital cost would be between C$10,000,000 and C$20,000,000.

The Canadian government owns the Trans Mountain pipeline which transports oil from Alberta to the west coast of British Columbia, where it is then shipped overseas to markets such as China.

Last year, a C$34 billion expansion completed the pipeline capacity by tripling it.

Trans Mountain says that the pipeline could reach its maximum capacity as early as 2027-2028.

"Canadian oil shipping companies want capacity." They also want certainty. "They don't want us to be in a situation where we are short barrels," Maki stated in an interview.

Canadian oil exports to the U.S. currently are exempt from tariffs. However, ongoing trade tensions between Canada and its southern neighbour have led Canada - which is the fourth largest oil producer in the world - to diversify their exports.

A new oil pipeline connecting the United States to foreign markets has been gaining support in public opinion polls, but no private companies have expressed an interest in developing such a project.

Trans Mountain also explores adding additional pumping station to increase flow along the line as well as construction of up to 40 kilometers (12-24 miles) of new pipes to increase the diameter of the line at certain locations.

Maki stated that the cost of these projects has yet to be determined. He added that an open season would take place for these projects in 2026, with a date in service sometime in 2029.

He said that if all of the Trans Mountain improvement projects are approved, Canada's oil export capacity could be increased by between 200,000 to 300,000 bpd.

Canada will export an average of 4,2 million barrels per day (bpd) in 2024. This is about 80% its total production.

CDN$1= US$0.72

(source: Reuters)