Canada Sees Steady Oil Export Gains

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Alberta is home to the bulk of the spending on oil-related initiatives in the Canadian market. With trade diversity in mind, Prime Minister Mark Carney believes Canada can be an energy superpower.

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Big Spending in Alberta

With Canadian Prime Minister Mark Carney looking to establish the nation as an energy superpower, data show Alberta is home to some $20 billion in grassroot projects tied to oil production.

Carney since assuming office last year has worked to advance the Canadian economy through trade and energy initiatives. Alberta will serve as the starting point for a new crude oil pipeline dubbed Pacific Link, recently designated as a project of interest. Included in a joint agreement between Alberta and the federal government earlier this year, data from Industrial Info Resources show the line could carry as much as 1 million barrels per (bpd).

The first phase of the project could begin next year. It would add to the nation's export potential by tapping Asian economies, with the provincial government of Alberta estimating it could draw in as much as US$140 billion in direct investments for Canada.

For drilling, MEG Energy is behind a $2.5 billion grassroot bitumen project in Alberta. The May River facility will have a nameplate capacity of 40,000 barrels per day if completed as expected by next year.

Industrial Info is tracking dozens of grassroots projects in Alberta worth a combined investment value of $20.75 billion.

Offshore in the Atlantic, Norwegian energy company Equinor is behind one of the larger projects by investment value with the Bay Du Nord facility. Tapping BW Offshore for preliminary design work, Industrial Info Resources data show Equinor would use a floating installation to drill 40 development wells in the so-called Flemish Pass Basin. Production could reach a peak capacity of 160,000 barrels per day (bpd) and would include as much as 1.2 million barrels in storage.

The Canada Energy Regulator reported that, in terms of percent, Newfoundland and Labrador is the fastest-growing province for oil production in the nation, with an annual increase last year of 15%, or 30,000 bpd.

Canadian Oil Tightly Bound to U.S. Markets

Much of what Canada produces winds up as exports to the United States. U.S. federal data for the week ending Oct. 16 show Canada delivered 3.9 million bpd on average, a 9.3% increase over the similar period last year.

Canada's own federal data, meanwhile, show total exports have increased every year since at least 2021. Data published Tuesday by the Canada Energy Regulator show total crude oil exports averaged 4.5 million bpd so far this year, compared to 3.8 million bpd in 2021.

Around 740,000 bpd moved through marine terminals so far this year, with another 80,000 bpd moving by rail. The rest goes through pipelines that are highly integrated with the U.S. energy system.

Carney aims to offset that with the Pacific Link pipeline. It's widely expected to follow the path of the Trans Mountain pipeline, the only network now that's able to move Canadian crude oil outside of North America.

A recent survey, meanwhile, found that most of respondents from the exploration and production side of the equation expect forward momentum over the coming months. Higher crude oil prices, supported by a geopolitical risk premium, are supportive of the industry.

On Monday, however, the Reuters news service reported that U.S. supermajor ConocoPhillips was expecting reductions in its Canadian workforce. A spokesperson said it was part of a regular review of its portfolio, though it follows a pledge last year to cut payrolls by as much as 25% after it acquired Marathon Oil.

By the Numbers

• 1 million bpd from Pacific Link oil pipeline for exports
• US$140 billion in direct investments for Canada from Pacific Link

Key Takeaways

• Canadian exports on a steady rise, with much of that targeting U.S. markets.
• Rallying in unity, the nation's prime minister is bent on cutting U.S. trade.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).