Synopsis: Reliance Industries has reportedly purchased its first batch of Canadian crude from the Trans Mountain pipeline, aligning with a growing trend among Asian refiners. Scheduled to start operations in May, the pipeline expansion, owned by the Canadian government, is set to triple crude flow from Alberta to the Pacific Coast, enabling access to new markets in Asia and the U.S. West Coast.
Reliance Industries has entered the fray by purchasing 2 million barrels of Canadian crude from Shell, marking its debut procurement from Canada's newly constructed Trans Mountain pipeline. Scheduled to commence operations in May, this government-owned pipeline expansion will substantially augment the flow of crude from Alberta to Canada's Pacific Coast, thereby granting access to Asian and U.S. West Coast markets.
In the transaction facilitated by Shell, Reliance joins a burgeoning cohort of Asian refiners embracing Canadian crude for export through the aforementioned pipeline. Shell will oversee ship-to-ship transfers to shuttle approximately four 500,000-barrel loads of Access Western Blend (AWB) onto a Very Large Crude Carrier bound for the Sikka port, home to Reliance's sprawling refining complex.
According to sources, the deal was struck at a $6 per barrel discount to September ICE Brent on a delivered basis. AWB, a variant of heavy and notably acidic diluted bitumen, hails from Canadian Natural Resources and MEG Energy.
In the broader market landscape, Canadian oil vendors are actively exploring avenues to bolster exports to Asia, where burgeoning demand and the propensity for higher premiums prevail. Notably, Chinese entities such as Sinochem, Unipec (the trading arm of Sinopec), and PetroChina have already secured multiple shipments of AWB and Cold Lake crude from the pipeline, slated for delivery to China in June, as per industry sources.
