Alberta’s Premier Danielle Smith and federal Prime Minister Mark Carney have made the official announcement of a new oil pipeline, to be built to Canada’s Pacific coast, broadening the access of Canadian oil producers to the Asian market.
The decision is a departure from previous Liberal governments’ energy agenda, which excluded the expansion of oil pipelines due to pressure from environmentalist groups and a focus on the energy transition away from hydrocarbons. Despite his firm support for the transition in past year, Prime Minister Carney has, after taking office, signaled he was open to compromises to boost Canada’s presence on global oil and gas markets, also backing LNG projects.
Interestingly, the announcement came on the heels of news that Carney had upheld a ban on tankers along British Columbia’s North Coast, which effectively eliminates one of the most attractive oil export corridors for vessels that would be loading from the new pipeline. Instead, the pipeline will terminate in southwestern British Columbia.
The new conduit will be built by Trans Mountain Corp. and have a capacity for 1 million barrels daily. The infrastructure will be majority owned by the Canadian federal government and the government of Alberta, Reuters reported, adding that Pembina, which will partner with Trans Mountain Corp. on the construction, will take a 10% stake in the project.
Canada’s oil production has been growing robustly despite environmentalist opposition and federal government policies. This year, it is expected to hit 5.3 million barrels daily. The only export corridor to markets other than the United States, however, is the Trans Mountain pipeline, already running at capacity due to the surge in demand for Canadian crude amid the Middle Eastern war. Prompted by these developments, Trans Mountain Corp. plans to boost its capacity from 890,000 barrels daily to 1.2 million barrels daily by 2029.
By Charles Kennedy for Oilprice.com
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