Keystone XL, Line 3 and Trans Mountain ‘more vital than ever’ as Energy East cancelled: analyst

TransCanada announced Thursday Oct. 6, 2017 that the Energy East pipeline would not go ahead as planned.
TransCanada announced Thursday Oct. 6, 2017 that the Energy East pipeline would not go ahead as planned. Alex Panetta / The Canadian Press

An analyst says the shelving of TransCanada Corp.’s (TSX:TRP) Energy East pipeline means it’s more vital than ever that three other pipelines to oil export markets proceed as planned.

AltaCorp Capital analyst Dirk Lever said Friday that Canadian producers will have to transport any new oil production over the next year or so using railcars because the pipelines leaving Western Canada now are essentially full.

LISTEN: Analyst says tight oil export pipeline capacity will remain after cancellation of Energy East

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He said the next capacity increase is expected to come with Enbridge Inc.’s (TSX:ENB) Line 3 replacement project, which is under construction and will add 370,000 barrels per day of capacity to the United States by early 2019.

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But that additional room will only just accommodate new output from oilsands expansions and the situation will remain tight until the Trans Mountain expansion pipeline to the West Coast proposed by Kinder Morgan is in service, which is expected to add 590,000 barrels per day by late 2019.

WATCH BELOW: Global News’ ongoing coverage of the Energy East pipeline 

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TransCanada hasn’t yet approved its Keystone XL pipeline into the U.S., but Lever said its 830,000-barrel-per-day capacity will likely provide enough room for Canadian oil production growth until about 2030, when the industry expects Canadian production to reach five million barrels per day.

He said Energy East could come off the shelf if any of the other pipelines don’t go ahead, or if market conditions change to encourage higher production growth.


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