UPDATE 2-Trans Mountain solicits pipeline nominations for June - traders

Wed Jun 1, 2016 6:21pm EDT
 
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(Adds company statement, paragraphs 4, 5)

NEW YORK, June 1 (Reuters) - Kinder Morgan Inc solicited nominations for space this week on its Trans Mountain pipeline system mainline for June, two trading sources said on Wednesday, as supply shortages from Canada's oil sands appeared to be reaching the West Coast.

The pipeline, which moves crude oil and refined products from Edmonton, Alberta, to the West Coast, is typically oversubscribed, so the available capacity was seen as unusual.

Sources said Trans Mountain received reduced nomination this month, after a raging wildfire in Alberta shuttered more than a million barrels per day of crude production.

"In April/May demand for our pipeline continued to be strong and was oversubscribed, however we did see a decrease in refined product. This is due to the shortage of refined products in Western Canada as a result of the Fort McMurray forest fires," said Lizette Parsons Bell, a spokeswoman for Trans Mountain.

The company added that decline had been offset by an increase in other products being shipped on the line, and said it expected the system to be full or nearly full during June.

The call for space by Kinder Morgan appeared to be one of the first indications of a more national impact from the production shutting in Canada's oil heartland.

While some facilities have resumed operations, analysts have pointed out that Midwest refiners may feel the effects of the Canadian outage longer as they move from maintenance into summer demand season. (Reporting by Catherine Ngai in New York, additional reporting by Eric M. Johnson in Calgary; editing by Diane Craft and David Gregorio)