Canadian pipeline companies are advancing expansion projects that could add more than 1 million barrels per day of oil export capacity over the next five years through optimizations of existing systems.
Enbridge Inc. (TSX: ENB) (NYSE: ENB), the country’s largest pipeline operator, announced Friday a final investment decision on a $1.4 billion expansion that will add 150,000 barrels daily to its Mainline system and 100,000 barrels to its Flanagan South pipeline by 2027. The Calgary-based company also sanctioned a $500 million project to expand its Express-Platte system by 30,000 barrels daily, set for 2028.
Trans Mountain Corp., the federally owned pipeline company, is pursuing chemical additives and additional pump stations to increase flows from Alberta to British Columbia’s coast by 50,000 to 90,000 barrels per day. The improvements come just over a year after the company completed its $34 billion expansion project.
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“We see supply kind of gradually growing, and these pipeline expansions are meeting that need,” Colin Gruending, Enbridge’s president of liquids pipelines, told reporters last Friday.
The region currently produces about 5 million barrels daily, and export pipelines could reach capacity by fall 2028 without the improvements, according to TD Cowen.
The planned expansions follow the May 2024 completion of the Trans Mountain expansion, which added 590,000 barrels daily of export capacity and helped narrow the price discount for Canadian heavy crude from $25.30 per barrel in November 2023 to about $13 per barrel by April 2024.
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More speculative proposals include a potential revival of the cancelled Keystone XL pipeline and an Alberta government proposal for a new pipeline to British Columbia’s north coast. Alberta Premier Danielle Smith announced in October that her province would commit $14 million to develop the West Coast proposal, though no private company has agreed to build it. British Columbia Premier David Eby has dismissed the plan, saying it lacks real private sector backing.
Canadian crude production hit a record 5.1 million barrels per day in 2023 as producers ramped up operations ahead of the Trans Mountain expansion. Industry analysts say the combination of pipeline optimizations should provide adequate export capacity through 2030 if companies proceed with planned improvements.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
2 Responses
As usual Danielle Smith is blowing smoke in the wind. Everything is going according to plan already. Oil and gas companies have it in hand. The oil is flowing at record numbers and will continue to do so. She is and has been and will continue to fear monger the people of Alberta, simply to get votes. It is all a narrative to sow fear and distrust in the federal government who has in fact been supporting them the whole time. It is a tired old tactic. The people of Alberta deserve a truthful Premier, who will work for them to diversify their economy and work with the federal government to do just that.
Will Enbridge announce any project via Carney’s M.P.O. If so the stock would get many upgrades for increased capacity. I have already bought 3 mining companies FOM,CNC & NOU which have a bright future. I own ENB but need a reason to buy more Enbridge stock.