Trade Deals, New Pipelines Emerging for Canada

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

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Summary

Two new crude oil pipelines were proposed recently by Canadian leaders. Canada aims to shore up its domestic infrastructure while looking for new trading partners overseas.

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Free Trade with Turkey

Expanding energy corridors at home, Canadian Prime Minister Mark Carney notched another economic victory by starting free-trade negotiations with the government of Turkey.

Western delegates headed to the capital of Turkey on Tuesday for the start of a summit of the NATO alliance. Carney, a former central bank governor, said his government began formal negotiations on a comprehensive free-trade agreement with long-time Turkish President Recep Tayyip Erdogan.

"Closer economic cooperation will support economic growth, support job creation, enhance competitiveness, strengthen supply chains, and help our businesses succeed in an increasingly dynamic global economy," a statement from Carney's office read.

Industrial Info Resources has been monitoring Canadian trade developments since Carney's inauguration last year. Since coming to office, Carney said Canada has secured more than 20 economic partnerships across five continents. Facing a bevy of tariff threats from the United States, he helped establish a Major Projects Office that's eliminating red-tape for nation-building projects, with the aim of cutting U.S. trade in half.

That could be a tall order given the strong economic ties between both nations. With some 4 million barrels per day (bpd) in exports, Canada is the largest foreign oil supplier to the U.S. economy by far, accounting for about 60% of total exports.

New Alberta-Ontario Pipeline Proposed

On Monday, the premiers of Alberta and Ontario announced a proposal for a new crude oil pipeline from Alberta to Sarnia on the U.S.-Canadian border in the Great Lakes.

"Alberta is committed to working with provincial and federal partners to turn this opportunity into reality," Alberta Premier Danielle Smith said in a statement. "A new west-east pipeline will connect Canadian energy with Canadian consumers while laying the foundation for future growth."

Dubbed the Northern Shield energy corridor, a 1,860-mile pipeline could deliver up to 500,000 bpd, with a potential for expansion to 800,000 bpd. Northern Shield would largely follow the outline from the now-abandoned Energy East project.

TC Energy, formerly TransCanada, pulled the plug on Energy East in 2017 after facing regulatory scrutiny. Energy East would have moved up to 1.1 million bpd, ending at a proposed marine terminal in Saint John, New Brunswick.

An existing crude oil pipeline system led by Enbridge has terminal points in Sarnia, moving through both Michigan peninsulas first. Parts of that network ruptured in 2010 in Michigan, leading to one of the largest inland spills in the nation's history and sparking state-wide opposition to the broader Enbridge network.

Critics of the new Alberta-Ontario proposal, meanwhile, questioned whether demand warranted new infrastructure.

Pembina Behind a New Pacific Coast Network

Last week, Carney and Premier Smith announced progress on a proposed new pipeline that would largely follow the path of the existing Trans Mountain network, the only network that can deliver Canadian crude oil outside of North America.

The new artery would be a joint effort from the operators of Trans Mountain and Pembina Pipeline Corporation.

"The project represents a once-in-a-generation opportunity to advance nation-building energy infrastructure that strengthens Canada's economy and expands access to global markets for Canadian energy," said Scott Burrows, the president and chief executive officer of Pembina.

By the Numbers

• 500,000 bpd in new oil transit possible in Canada
• 60% of U.S. foreign oil imports come from Canada

Key Takeaways

• Prime Minister Carney notching up trade deals
• At home, oil infrastructure proposals emerge

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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).