Reliance completes first oil acquisition from Canada's Trans Mountain Pipeline
What's the story
Reliance Industries has entered a new market, by securing its first oil acquisition from the newly operational Trans Mountain Pipeline in Canada.
The company has procured two million barrels of Canadian crude oil from Shell, with delivery scheduled for July.
This strategic move places Reliance among a growing group of Asian refiners, capitalizing on the Canadian crude export via the new pipeline.
Pipeline impact
Trans Mountain Pipeline set to boost crude flow
The Trans Mountain Pipeline, owned by the Canadian government, is set to commence oil transportation in May.
This development promises to significantly increase the volume of crude flowing from Alberta to Canada's Pacific Coast, nearly tripling the current capacity.
The expansion is expected to enhance access to markets in Asia, and the US West Coast.
Transportation plan
Shell to facilitate crude transport to Reliance's refining complex
Shell is expected to facilitate ship-to-ship transfers for transporting approximately four 500,000-barrel cargoes of Access Western Blend (AWB), onto a very large crude carrier (VLCC).
The oil will then be shipped to Sikka port, where Reliance currently operates the world's largest refining complex.
The deal was reportedly struck at a $6 per barrel discount to September ICE Brent, on a delivered basis.
Market expansion
Canadian oil sellers eyeing Asian market
With growing demand in Asia, Canadian oil sellers are exploring innovative strategies to increase exports to this region, where refiners are known to pay higher premiums.
Chinese firms like Sinochem, Unipec - the trading arm of Asia's largest refiner Sinopec, and PetroChina have already secured several cargoes of AWB and Cold Lake crude from the pipeline for delivery in June.
However, Reliance has not commented on this development.