Alberta Oil Industry Faces Billions in Spending Hikes for Pipeline Expansions
The oil industry in Alberta is facing significant spending hikes to fill planned pipeline expansions, including the newly designated Pacific Link pipeline. Companies such as Suncor Energy Inc., Canadian Natural Resources Ltd., and Cenovus Energy Inc. will have to weigh the costs of new projects against their balance sheets, which have been strengthened by high crude prices.
With Ottawa's national interest listing on the Pacific Link pipeline, construction is likely to move forward. The pipeline would carry one million barrels of oil a day from Bruderheim, Alta., to Delta, B.C. Other proposals include South Bow Corp.'s Prairie Connector and capacity expansions on the Trans Mountain and Enbridge Mainline systems.
Investors in the largest oil sands companies have reaped rewards from the sector's financial strength, but analysts predict that production-growth rates will be lower than those seen in 2003-2008. To increase output, companies are focusing on expanding existing facilities rather than greenfield projects.