Canada Officials Seek to Move More Oil to the Pacific as Part of Trade Diversification

Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

Summary

Canadian leaders toured a port terminal in British Columbia that would serve as the end point of a new crude oil export pipeline. Canada's Pacific Coast is emerging as a hub for trade diversity.

Pacific Link to Carry 1 Million BPD

Canada is an energy-rich and responsible producer, showcasing it has what the world wants in a trading partner, ministers said in touring the port that would serve as the terminal point for a new crude oil pipeline.

Industrial Info Resources is monitoring developments on a new crude oil pipeline dubbed Pacific Link. Largely following the path of the existing Trans Mountain pipeline, the new artery has a total investment value of US$950 million and would have a peak throughput capacity of 1 million barrels per day (bpd).

Prime Minister Mark Carney's office designated Pacific Link as a project of national interest last week. It is moving forward along with a carbon capture project that the government said would abate carbon emissions equivalent to pulling 5 million cars off Canadian roads annually.

"We do not have to choose between economic growth and a healthy environment," federal Energy Minister Tim Hodgson said in a statement on Friday. "As we move toward shovels in the ground on Pacific Link by September 2027, I look forward to showing Canadians and the world once again what British Columbia and Canada do best as a responsible energy superpower."

Hodgson was joined by a handful of federal officials in touring the Westbridge Marine Terminal in British Columbia, the terminal point for the Trans Mountain pipeline. With an expanded berth, the terminal can accommodate 34 vessels per month.

As of now, the federal government expects Pacific Link will generate more than US$14 billion in gross domestic product and US$70 billion in government revenue by 2060. Ports along the Pacific Coast in Canada already deliver nearly US$280 billion worth of goods annually.

Pacific Coast Part of Trade Diversification Efforts

Pacific Link is part of a trade diversification strategy steered by the prime minister, a former central bank governor working to counter the economic pressure from U.S. President Donald Trump. Carney is working to reduce trade with the United States, its largest trading partner, through various nation-building initiatives.

Carney said last week that Pacific Link represents a "once in a generation" opportunity for Canada to achieve greater trade autonomy and establish itself as a global energy superpower.

Only about 10% of the nation's crude oil exports, however, make it out of North America through Trans Mountain. The rest of its exports go to the United States, where the refinery sector is geared not toward the processing of lighter shale oil, but the heavier type of crude oil found in places such as Canada and Venezuela.

Over the week ending September 25, U.S. federal data show Canada exported an average of 3.4 million bpd of crude oil to the United States, accounting for 62% of the total.

Carney's strategy is already making headway in the liquefied natural gas sector, however. The LNG Canada facility in British Columbia became the first of its kind last year to export from the Pacific Coast of North America, helping the Canadian government tap non-U.S. markets.

LNG Canada already has offtake agreements from both Asian and European economies alike. Last week, developer Shell said it made a final investment decision on the second phase of the terminal, which would double its capacity.

Shell said the second phase would include two additional liquefaction units, or trains, and include additional storage and a loading berth at the port of Kitimat.

By the Numbers

• 1 million bpd: Potential new pipeline capacity from Canada
• 10%: The amount of Canada's oil exports that leave North America

Key Takeaways

• Energy a main component of Canadian trade diversity strategy.
• LNG Canada last year became the first to deliver the super-cooled gas from the Pacific Coast.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).