Very, very bullish Trans Mountain to shift pricing power to Canada's oil and gas producers
Whether it’s the Trans Mountain oil pipeline expansion set to begin commercial service on May 1, or the large-scale LNG export facility nearing completion on the West Coast, Canada's oil and gas executives are eyeing higher prices spurred by the first new major take-away capacity in over a decade. That has stock analysts calling for shares to push higher as producers look to new foreign markets.
The improving egress picture in Western Canada was a hot topic at this week’s BMO Capital Markets CAPP (Canadian Association of Petroleum Producers) Energy Symposium in Toronto. Randy Ollenberger, one of the bank’s top oil and gas equity analysts, called the long-awaited projects “very, very bullish for the sector.”
We’re in the midst of something we haven’t seen for a long time in Canada, and that’s the expansion of pipeline capacity. This includes LNG capacity off the West Coast. We haven’t had that for over a decade,” he told conference attendees on Tuesday.
“[Companies are] on the cusp of delivering significant amounts of surplus cash flow to shareholders. When it arrives in shareholders' pockets, it will start to positively influence the valuation of the sector,” he added. “We don’t think it’s being fully appreciated by investors in the space.”