Canada's West Coast Pipeline: A Conditional Bet with Uncertain Rewards

On July 2, Prime Minister Mark Carney and Alberta Premier Danielle Smith announced a one-million-barrel-per-day oil pipeline from Bruderheim, Alberta to a VLCC-capable terminal at Roberts Bank, south of Vancouver.

The pipeline, led by the federally owned Trans Mountain Corporation, is expected to cost between $35.2 to $43.7 billion and will travel approximately 1,250 kilometers on the existing Trans Mountain corridor.

A conventional oil company executive analyzed the project's value and concluded that it's a conditional bet rather than a commercial certainty.

The pipeline would help reduce transportation bottlenecks for Canadian oil, narrowing the WCS-WTI differential, but the promised $3-per-barrel boost is unlikely due to the quality discount already reflecting the lower quality of crude oil.