Increasing crude bottleneck next by 2015From Platts:
"Oil sands production is growing by an average 10% each year, and we also see a reversal in the trend for conventional output, with more light barrels being produced," Lau said.
CAPP is due to release its annual forecast in June for the nation's oil production short, medium and long-term forecast, but Lau said it would not be any "substantially" different.
Peter Howard, director of the Canadian Energy Research Institute, said on the sidelines of the conference that although a projected crude oil output of 3.9 million b/d next year is "certainly doable," 2015 will be a "critical" year as new pipelines that will assist in increasing the takeaway capacity of the heavy and light barrels of western Canadian crude are unlikely to be built by then.
"While on the one hand we see construction work at an advanced stage on adding another 400,000 b/d of oil sands output in Alberta and Bakken light crude in Saskatchewan to be produced next year, there will be a shortage in shipment capacity," he noted.
Stressing the critical need of market access for new oil production in Western Canada, Lau said that while work is ongoing for building new pipelines to the US and Canadian Pacific Atlantic coasts, crude-by-rail-shipments from Western Canada are projected to reach 1.4 million b/d by the four quarter of 2016.
In December 2013, according to CAPP estimates, total volume of crude shipped by rail from Western Canada was 164,000 b/d, she said.
"The onus will rest to a significant extent on rail to carry it through," Howard said, adding although orders have been placed for 40,000 new rail cars by Canadian and North Dakota-based producers, the rail industry is going through a strict regulatory oversight for safety reasons.
Each new rail car has a capacity to transport 560-600 barrels and are due to be delivered in 2014 and 2015, with a bulk of them next year, he said.
"Rail will carry Western Canadian crude to the US, but producers in Alberta and Saskatchewan are targeting markets in Asia that will fetch higher prices," Howard said.
While TransCanada filed last month a project description for the 1.1 million b/d Energy East pipeline to open up an export outlet along the Atlantic coast, Enbridge received in late 2013 regulatory approval from the National Energy Board for the 525,000 b/d Northern Gateway pipeline. Also, on April 2, NEB announced hearing dates for Kinder Morgan's 890,000 TransMountain Expansion facility.
Both pipelines will open up an export option on the Canadian Pacific Coast.
"We do not expect any of the three facilities to get built before 2017/18. This would exert pressure from next year onwards for some 500,000 b/d of Western Canadian heavy and light crude oil to find a market," Howard said.
https://www.platts.com/latest-news/oil/calgary/canadas-oil-output-seen-growing-to-39-million-21480235
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There is no doubt that Canexus will fully contract NATO and operate it at full capacity over the next few years, no matter how fast new pipelines are approved, no new capacity is coming online before 2017 at the earliest, and even if such capacity was to come in 2017/2018 it will still be behind the production curve. Not to mention the economics of moving raw bitumen through unit trains is competitive with pipelines. The longer those pipelines take to build the better the efficiencies for moving bitumen by rail as the industry expands its North American processing infrastructure (ie: heated locomotives, heated loading and loading terminals and diluents recovery units).
Regards,
Nawar