CAPP: Oil pipelines still urgently needed

Projected growth in Canadian crude oil production will exceed existing pipeline capacity, according to a recent forecast from the Canadian Association of Petroleum Producers highlighting the “urgent need for pipelines heading east, west, and south.”

CAPP’s report, 2017 Crude Oil Forecast, Markets & Transportation, said the pipeline network can transport 4 million b/d of oil and oil products, but by 2030 will need to move more than 5.5 million b/d.

“The urgent need for new pipelines to increase our competitiveness continues to be one of the biggest challenges facing our industry,” said Tim McMillan, CAPP’s president and chief executive officer. “Without access to emerging new markets we’re putting our economy at risk.”

Overall Canadian oil production will increase to 5.1 million b/d in 2030, up from 3.85 million b/d in 2016, CAPP said. The growth will be driven by a 53% increase in forecasted oil sands production of as much as 3.7 million b/d in 2030 from 2.4 million b/d in 2016.

In the short term, however, CAPP said capital spending in the oil sands is expected to decline for the third consecutive year to $15 billion in 2017 from $34 billion in 2014.

Drilling by conventional crude oil producers is forecast to increase 70% compared to 2016 levels, but will still be 40% lower than in 2014.

New offshore production from the Hebron project in Newfoundland and Labrador, expected at yearend, will contribute to a rise in eastern Canadian output to 307,000 b/d by 2024. But due to natural declines, production is expected to drop to 186,000 b/d by 2030.

Regarding exports, CAPP said about 99% goes to the US.

Data for the annual forecast was collected from producers in March and April (OGJ Online, June 23, 2016).

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