Chevron is turning to trucks and railcars to transport crude oil to its Burnaby refinery, thanks to increased demand on Kinder Morgan's Trans Mountain pipeline.
Starting this month, the refinery will bring in 2,000 to 3,000 barrels of crude - about seven to 10 trucks' worth - via trucks. Early next year, the company will start using rail shipments to bring in another 6,000 to 8,000 barrels.
"These supplemental crude shipments by truck and rail do not represent an expansion or increase in the refinery's overall throughput capacity of 50,000 to 55,000 barrels per day," said Chevron's Ray Lord. "We are responding to an ongoing supply constraint on our operations that is impacting our ability to continue supplying fuel to our customers at competitive prices."
The trucks are picking up crude brought in from Alberta by rail to a Lower Mainland facility, and next year, Chevron plans on using railcars that arrive at the refinery.
"In addition to the tank trucks, plans are underway to facilitate crude shipments to the refinery by rail beginning in early 2013. Both modes of shipment may be used, depending on logistics and economic conditions, to help us mitigate the ongoing impacts of pipeline apportionment," Lord said.
Kinder Morgan's Trans Mountain pipeline is currently the only line that runs a variety of oil products to the West Coast from Alberta. Due to increased demand on the pipeline, Chevron has not been able to have a reliable supply of crude.
"We have been managing the apportionment issue several years- but since late 2010, the more significant apportionment of the pipeline has created additional challenges in securing the reliable, economic supply of crude feedstock we need to remain competitive and to continue meeting the needs of our customers," Lord said.
"Space on the Trans Mountain mixed-use pipeline is allocated to shippers on a monthly basis by Kinder Morgan using a nomination process," Lord explained. "If the total amount of nominated space exceeds the pipeline capacity, all of the shippers' nominations are equally apportioned - including Chevron's. - This means that all of the shippers who use the pipeline to move products to the West Coast are receiving only a portion of what they are requesting."
Lord said Chevron expects this to persist, so the company is taking action to ensure the refinery has a reliable supply of crude. Chevron is also working with the truck drivers to minimize impact on traffic along the designated routes.