Planned Pipelines Could Support Up to 3 Million Barrels Per Day of Western Canada Oil Growth
A new analysis by Enverus Intelligence Research finds that planned brownfield expansions and recently announced greenfield pipelines could provide sufficient export capacity to support 2 MMbbl/d, 3 MMbbl/d of Western Canada Sedimentary Basin oil production growth into the late 2030s.
EIR estimates WCSB oil production will grow by approximately 200 MMbbl/yr through 2035, with pipeline capacity expected to run ahead of producer needs for most of the decade. Expanded takeaway is therefore expected to reduce the risk of severe pipeline congestion and apportionment-driven discounts that have periodically affected Western Canadian crude markets.
The research points to roughly 1 MMbbl/d of firm takeaway from a combination of an existing pipeline optimization project, system optimizations, and the Prairie Connector-Bridger project. EIR expects WCS differentials to remain around $12/bbl, $15/bbl below WTI, roughly reflecting the cost of moving a barrel to the Gulf Coast.
The report also notes that the experience following a major recent Canadian pipeline expansion demonstrated how spare capacity can materially narrow the differential. Among proposed new pipelines, Prairie Connector-Bridger screens as the greenfield project most likely to proceed in EIR’s assessment because it clears three critical development gates identified by the research.