Two new crude oil pipelines will provide enough capacity to ship Canadian production to market for export until at least the mid 2020s, Enbridge CEO Al Monaco said Friday – emphasizing his company's Line 3 should be one of them.
Monaco's comments come amid growing concern Canada faces pipeline overbuild after years of limited market access. The Canadian government approved Enbridge's Line 3 replacement project and Kinder Morgan's Trans Mountain expansion last November, while TransCanada has reapplied to continue construction on the highly controversial Keystone XL Pipeline. TransCanada is also awaiting permits for its proposed Energy East project.
If all four pipelines are built, the 2.1 billion barrels per day (BBPD) leap in capacity would overwhelm industry forecasts of Canadian crude production growth of 850,000 BPD by 2021, Kallanish Energy learns.
"If you look at the supply profile and you look at our expansion replacement capacity for Line 3 and one other pipeline, that should suffice, based on the current supply outlook, out to at least mid-next decade," Monaco said during Enbridge’s fourth-quarter earnings call.
Wood Mackenzie analyst Mark Oberstoetter told Reuters his firm agreed with Monaco's assessment on the need for new pipelines.
"We definitely need two of these pipelines by around 2025 and, after that, it depends on the supply outlook," Oberstoetter said. "There's not an evident need to get three or four pipelines built."