Canada takes a page from the Saudi oil playbook: Bousso
USO•Canada plans to fast-track the proposed Pacific Link pipeline, a 1-million-barrel-per-day export route estimated to cost C$35.2 billion to C$43.7 billion. The government expects construction to begin next September as it seeks to diversify oil exports beyond the United States.
1. Pipeline plans
Canada plans to fast-track approvals for the Pacific Link pipeline, which would connect Alberta’s oil hub to the west coast and add 1 million barrels per day of export capacity. The government estimates the project will cost C$35.2 billion to C$43.7 billion, with taxpayers expected to pay most of the bill, and expects construction to begin next September.
2. Reducing reliance on US
Roughly 90% of Canada’s oil exports go to the United States. Energy Minister Tim Hodgson said Canada does not intend to trade less with the United States, but intends to trade more with other countries. The pipeline would broadly follow the Trans Mountain system, which has capacity of 890,000 barrels per day.
3. Production outlook
Hodgson said Canadian oil production could rise by 2 million to 2.5 million barrels per day over the next five to seven years, and LNG exports could reach 50 million metric tons per year by 2030, up from around 14 million today. Commodity Context founder Rory Johnston forecast more modest oil production growth of 100,000 to 150,000 barrels per day annually over the next decade.
