While the Keystone XL pipeline languishes along with plans for increased oil exports to and through the U.S., Canadian oil exporters took a step Thursday towards building new Asian trading relationships by launching reliable tanker deliveries overseas from the Pacific coast of British Columbia.

Kinder Morgan Canada won permission from the National Energy Board (NEB) to earmark capacity on its Trans Mountain Pipeline from Edmonton for loading up ships at its Westridge Terminal in Vancouver Harbor.

It was the first step in an incremental plan to export up to 1.1 million barrels per day through the Westridge terminal.

The dedicated ocean-going export capacity will be 54,000 b/d. The effect of the decision is to increase regular tanker loadings to a minimum of 79,000 barrels p/d, counting current average use of the Westridge dock for 25,000 b/d by shippers that do not have space reserved for overseas marketing but are expected to continue their past performance.

Protests by B.C. environmental and aboriginal groups, which have vowed to resist all tanker traffic, were set aside as irrelevant. The NEB ruled that the resistance did not have to be considered because the Trans Mountain scheme does not increase the capacity of an established delivery system, and other national authorities are primarily responsible for tanker traffic if and when additions are proposed.

During contested hearings, Trans Mountain told the NEB that the decades-old Westridge terminal can probably load up tankers at a rate of 150,000 to 200,000 b/d. The maximum reached to date is 143,000 b/d.

The decision authorized Kinder Morgan to press ahead with opening moves on an Asian export expansion of Trans Mountain. The approved arrangements include a tolling premium on pipeline space booked for Vancouver tanker loadings. Five shippers — including two Canadian oil sands producers and a trading arm of China’s state petroleum company — have committed to pay C$286 million (US$ at par) in premiums that will go into an account dedicated to planning an expansion and advancing it through the regulatory process.

Kinder Morgan is currently holding an open-season auction of subscriptions to a Trans Mountain expansion, with a target of doubling the line’s capacity to 600,000 b/d for an estimated $3.8 billion.

An assurance that the auction will be wide open was provided by the NEB approval of the initial capacity dedications to tanker shipments. The ruling rejected a proposal by Kinder Morgan to grant the first group of Asia exporters first rights to additional space on the proposed expansion. Kinder Morgan estimates that total deliveries via the current Trans Mountain right-of-way to Vancouver can be raised to 700,000 b/d with eventual additions of pumps and allied hardware.

The ultimate capacity of the line west from Edmonton is forecast to be 1.1 million b/d in a long-range expansion program known as TMX. The last stage in the program – a 400,000 b/d addition to the current line’s 700,000 potential – requires a spur line to Kitimat from a point west of the Rocky Mountains in the B.C. interior. New capacity, in pipe large enough to support the ultimate 1.1 million barrels daily, was installed in 2007-08 as far as the takeoff point with a construction program authorized by Trans Mountain’s 1950s federal charter and permits.

Canadian industry interest in the Trans Mountain growth scheme has been on the rise as a result of price premiums on overseas oil markets and U.S. delays in approving TransCanada Corp.’s Keystone XL project for oil sands exports from Alberta to refineries on the coast of the Gulf of Mexico.

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