Tight oil export pipeline capacity expected to persist as Energy East cancelled
CALGARY — It’s more vital than ever that three other pipelines to oil export markets proceed as planned in the wake of TransCanada Corp. (TSX:TRP) shelving its Energy East pipeline on Thursday, says AltaCorp Capital analyst Dirk Lever.
Lever says Canadian producers will have to transport any incremental new oil production over the next year or so using railcars, and the pipeline transportation system out of Western Canada will remain tight for years.
“We already know the next incremental barrel of production has got to go by rail because the pipelines are effectively full,” he said Friday.
In a report in July, RBC Capital Markets predicted oilsands production would grow by 900,000 barrels per day in the next five years thanks to startup of Suncor Energy Inc.’s (TSX:SU) 194,000-bpd Fort Hills mine and several smaller projects, including an 80,000-bpd expansion at Canadian Natural Resources Ltd.’s (TSX:CNQ) Horizon mine and upgrader.