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Trans Mountain Corp., a pipeline operator owned by the Canadian government, is working at speed to boost the volumes it can ship from the west coast to Asia as the war in the Middle East roils flows.

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The company is undergoing a major expansion as the conflict curbs supplies, while a trade fight with the United States has also pushed Ottawa to seek partners elsewhere, chief executive Mark Maki said in an interview.

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“It’ll be heavy oil that wants to move,” Maki said on the sidelines of the Asia Pacific Petroleum Conference in Singapore, referring to viscous, higher-sulfur Canadian crude that’s closer to Middle Eastern grades than varieties such as West Texas Intermediate. “There’s very strong demand for heavy oil in China.”

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Canada’s trade relations have been disrupted by the dispute with its larger southern neighbour, increasing the long-run incentive for the country to deepen ties with more distant economies, including energy-hungry Asia. At the same time, crude importers in the region have been reassessing security of supply as the Iran war continues to disrupt shipments from the Persian Gulf.

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The plan is to increase the amount of oil that can be sent to the west coast to 1.2 million barrels a day by the end of 2028, followed by a further one million barrels a day between 2032 to 2034, Maki said. “I see China as a growth market, and in India, Korea and Thailand.”

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While the expansion plans have been under way for a long time, the latest geopolitical upheaval has brought some of those moves forward, Maki said. That includes an additional 10% increase to its current 890,000-barrel-a-day capacity, which will be completed by the end of this year, he said. It was originally scheduled to come online only next year.

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“Everything that we do now is: can we go faster?” Maki said. Geopolitical developments have improved the thesis behind the Trans Mountain project, “which was access to Asian markets. That’s the place to be,” he said.

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Bloomberg.com

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