Suncor aims to gain 'unique' advantage from Trans Mountain pipeline

financialpost.com:

Suncor Energy Inc. says it will be banking on its trading platform to remove middlemen and directly negotiate with new customers to get a “unique” advantage once it starts shipping to additional regions through Canada’s now-operational Trans Mountain pipeline expansion.

The Alberta-based company, which reported net earnings of $1.6 billion, including an all-time high in oilsands production, in the first quarter, said the May 1 start of Trans Mountain Corp.’s new pipeline would increase oil production profits, but that could be partially offset by increased refinery costs.

“What might make us a bit unique is we are not reliant on third-party trading shops,” Dave Oldreive, Suncor’s executive vice-president of downstream, said. “This allows us to capture the full value of the transaction by transacting directly with customers.”

He added that the company has leased vessels operating in the Pacific Ocean, which will give it an advantage in terms of shipping costs.

The new 1,150-kilometre pipeline is part of an expansion project that twins an existing line built in 1953 connecting Alberta and British Columbia. Together, the two pipelines are expected to deliver about 890,000 barrels of oil per day.

Canada’s heavy crude oil trades at a discounted price compared to the light crude oil from the United States due to factors such as transportation costs, limited market access and quality differences. Analysts and industry insiders expect the Trans Mountain pipeline to reduce the difference in prices since it will make transportation cheaper and open new markets.

Oldreive said he expects crude oil in the pipeline to reach markets in California and Asia. He added that Suncor’s trading offices were working to “strengthen