Markets - Pipeline Expansion

A February 2005 report from the Canadian Association of Petroleum Producers on oil pipeline expansion describes how western Canada has sufficient pipeline capacity to move crude oil to
markets for the next several years. The total excess capacity across the three major
trunk line systems exiting western Canada is about 300,000 b/d. The majority of western Canada’s crude oil supply continues to be sold into eastern markets, primarily in the U.S. midwest. These primary market areas are accessed through the Enbridge pipeline system. Crude oil shipped to secondary markets, such as cargoes moved off the west coast, generally arise after the available capacity on the Enbridge system is fully subscribed, i.e., the Enbridge system is in apportionment. The distinction between primary and secondary markets is important in assessing future pipeline capacity requirements. From a planning perspective, adequate pipeline capacity out of western Canada is defined as sufficient space to avoid sustained apportionment on the Enbridge system.

A comparison of the forecast growth in crude oil production and supply versus available Enbridge pipeline capacity shows a potential shortfall as early as 2007-08. At that time, Enbridge is forecast to be apportioned thus displacing barrels into secondary markets. To accommodate this near term shortfall in capacity on Enbridge, small scale expansion and debottlenecking options are available for the Enbridge system to boost capacity by about 150,000 b/d. Other pipelines also have potential to implement small system expansions. Overall, these capacity increases are forecast to provide sufficient aggregate pipeline capacity until 2010-11.

The production forecast for light crude oil and equivalent (synthetic) shows significant growth. However, the combination of declining conventional light oil production and synthetic supplies shipped as diluent in heavy crudes (Synbit) tend to mitigate the net growth in supply so that existing light oil pipeline capacity is forecast to be sufficient until 2015. The future increases in pipeline capacity are required primarily to accommodate growth of new supplies of Synbit and Dilbit, i.e., medium sour and heavy crudes.