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CALGARY, AB – One of the main challenges for the growing western Canadian oil industry—a recurring shortfall in export pipeline capacity and the oil price instability that comes with it—has been alleviated by major capacity additions, with another project that would provide more breathing room close to completion. However, a S&P Global Commodity Insights analysis finds that the situation may not last, and may experience tightness again in the future, depending on various factors. The analysis by the S&P Global Oil Sands Dialogue finds that Western Canadian pipeline takeaway capacity should be adequate, with prices in the basin more predictable for the foreseeable future as a result. Nevertheless, by the late 2020’s overall pipeline system utilization could exceed 90% on an annualized basis, leaving little cushion to adjust to any system upsets should they occur. “At first glance, it appears that Canadian crude exports may avoid any major bottlenecks and transportation-driven price discounts over the next decade,” said Aaron Brady, vice president, energy oil market services, S&P Global Commodity Insights . “However, our analysis indicates western Canada may not be entirely out of the woods. The system appears it may run quite full later this decade, raising the risk […]
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