Canada’s Trans Mountain oil pipeline has been shut down temporarily because of rainstorms pounding parts of the province of British Columbia, the operating company said in a statement on Nov. 15.

The Canadian government-owned pipeline ships 300,000 bbl/d of crude and refined products from Alberta to the Pacific Coast. Work on a major expansion project on the pipeline has also been halted, Trans Mountain Corp. said.

“As a precaution, Trans Mountain has shut down the Trans Mountain Pipeline due to widespread flooding and debris flows in the area around Hope, B.C.,” a company spokeswoman said in an email. She did not give any information on when the pipeline is expected to restart.

Heavy rains and flooding are causing widespread disruption across Canada’s westernmost province. Landslides have trapped people in vehicles on highways and the entire town of Merritt, with a population of 7,000 people, has been ordered to evacuate.

Trans Mountain is a key oil export route and nearly two-thirds of its volumes in the first half of 2021 were light oil deliveries heading to U.S. refineries, said IHS Market Vice President Kevin Birn, citing Canada Energy Regulator data.

Refiners in Washington state—including Phillips 66 and BP—have other options to acquire oil, as they have access to the Pacific Ocean.

“The disruption's duration is the key metric for scale of impact,” Birn said.

Western Canada Select (WCS) crude for December delivery, the benchmark Canadian heavy crude grade, showed limited reaction to the pipeline shutdown. WCS last traded at $19.15/bbl below U.S. crude futures, according to NE2 Canada Inc., 70 cents narrower than the Nov. 12 settlement price.

Comments