Largest Canadian crude shipment to China since 2015 to arrive in July

Shipments of Canadian crude to Asia are usually rare, however, in recent months, cargoes have increased with tankers heading to China, Thailand and South Korea.  Kinder Morgan photo.

Canadian crude exports to China hits 16,600 b/d in July

An Aframax tanker that set sail from the Port of Vancouver earlier in July is delivering the largest shipment of Canadian crude to China since January 2015, according to trade flow data from Reuters.

The Serene Sea carrying about 514,000 barrels of crude loaded at Kinder Morgan’s Westridge Marine Terminal the Port of Vancouver and departed on July 4. The vessel is expected to arrive in Guangdong, a province in the south of China, on July 26.

The Solomon Sea loaded in April and sailed for ports in Thailand and South Korea and another tanker, the Diva, was also loaded in April and departed for Zhejiang in eastern China.

The ships carried a combined total of 742,000 barrels of crude to Asian customers.

Currently, Canadian crude producers are struggling to get their oil to Asian markets because of a lack of pipeline capacity to tide water.  And most Canadian crude loaded in Vancouver has traditionally been shipped to the US West Coast.

While crude exports from British Columbia to Asia are rare at this time, the total Canadian crude exports to Asia hit 16,600 barrels per day in July.

“The Brent-WTI spread has narrowed and there’s less call for U.S.-based crude,”  Thomas Finlon, director of Energy Analytics Group LLC told Reuters. “There is an opportunity for Canada to send material to China, but I don’t think demand is going to be overwhelming.”

Compounding pipeline restrictions, Canadian crude exporters are having to work around the limited export capacity at the Westridge terminal which can accommodate ships up to Aframax in size, approximately 120,000 dead weight tons, and barges.

Very Large Crude Carriers, capable of carrying 2 million barrels of crude oil, cannot be loaded at the Port of Vancouver.

An expansion plan at the Westridge Terminal includes a new dock complex with three berths, a utility dock to moor tugs, boom boats and emergency response vessels, additional delivery pipelines and an extension of the land along the shoreline to accommodate new equipment.

The Canadian Government bought Kinder Morgan Canada in May for $4.5 billion in an effort to ensure the Trans Mountain Pipeline expansion project continued after Kinder Morgan announced it was halting work on the contentious pipeline in April.