Teekay Tankers believes a new Canadian oil pipeline extension could add huge aframax demand in the Pacific.
The expansion of the Trans Mountain line to Vancouver later this year, and an increasing capacity of 590,000 barrels per day, bodes well for the tanker size, the shipowner believes.
Chief executive Kevin Mackay told an earnings calls that the west coast terminal is a new outlet for Canadian seaborne crude exports and will be limited to aframax tonnage.
He expects the expansion could result in between 30 and 35 aframax loadings per month.
This compares with one a week now, he said, equating to a rise of about 30 liftings per month, and he believes Teekay is well placed to capitalise.
“This is an exciting development and has the potential to create significant aframax demand once the pipeline is up and running, with the operator currently expecting the start of oil flows … during the second quarter of 2024,” Mackay told analysts.
“It really is a significant uplift in export capacity.”
He said the oil can be moved into various markets: down the US west coast; to Panama to be put on VLCCs and on to Asia; or through the Panama Canal.
“At this point in time, we don’t know. In terms of the destinations of those cargoes, we’ll have to wait and see how the trading environment picks up on that oil,” he told the call.
“The only sure thing is that you can only load an aframax out of Vancouver. You can’t take a suezmax or a VLCC in there.
“So from a demand perspective, it’s a really exciting area that we’re really keen to keep an eye on.”
Increased complexity
Shipbroker Gibsons has said the pipeline will create a new Pacific market for aframaxes.
The London shop believes it is an important development that will allow landlocked Albertan grades to be shipped west.
Added to Red Sea and Panama Canal disruption, Mackay pointed to increased complexity and supply chain inefficiency creating additional tanker demand, as well as spot rate volatility in an already fundamentally very tight market.
