Enbridge CEO Says Canada Only Needs Two More Export Pipelines
CALGARY, Alberta, Feb 17 (Reuters) - Two new crude oil export pipelines will provide enough capacity to ship Canadian production to market until at least the mid 2020s, Enbridge Inc Chief Executive Al Monaco said on Friday, making clear his company's Line 3 should be one of them.
Monaco's comments come amid growing speculation that Canada faces pipeline overbuild after years of struggling with limited market access.
The Canadian government approved Enbridge's Line 3 replacement project and Kinder Morgan's Trans Mountain expansion last November, while U.S. President Donald Trump invited TransCanada to reapply for a Keystone XL permit in January. TransCanada is also awaiting permits for its proposed Energy East project.
If all four pipelines get built the 2.1 billion barrel per day surge in capacity would fast outpace industry forecasts of Canadian crude production growth of 850,000 bpd by 2021.
"If you look at the supply profile and you look at our expansion replacement capacity for Line 3 and one other pipeline, that should suffice based on the current supply outlook, out to at least mid-next decade," Monaco said on a fourth quarter earnings call.
Monaco said Enbridge had another 400,000 bpd of potential capacity expansion opportunities in addition to Line 3 but the company would be guided by the amount of supply coming out of western Canada.
Wood Mackenzie analyst Mark Oberstoetter said his firm agreed with Monaco's assessment on the need for new pipelines.
"We definitely need two of these pipelines by around 2025 and after that it depends on the supply outlook," Oberstoetter said. "There's not an evident need to get three or four pipelines built."
Enbridge, Canada's largest pipeline company, also announced a C$1.7 billion ($1.3 billion) investment in a North Sea windfarm.
The 50 percent ownership in EnBW's Hohe See strengthens Enbridge's footprint in Europe's booming offshore wind power industry.
Monaco said there could be more to come given the push towards renewable energy in a number of European countries.
Enbridge reported fourth-quarter profit on Friday that included a C$373 million before-tax impairment charge related to its Northern Gateway pipeline, which the Canadian government blocked last year.
Earnings attributable to the company's shareholders were C$365 million ($279 million), or 39 Canadian cents per share, in the fourth quarter, hurt by charges, including for asset impairment and restructuring.
($1 = 1.3110 Canadian dollars)
(Additional reporting by Arathy S Nair in Bengaluru; Editing by Savio D'Souza, Grant McCool and Bernard Orr)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Gunvor CEO Sees Russian Refining Capacity Taking Hit from Drone Strikes
- Sinopec Engineering Posts Higher Annual Petrochemicals Revenue
- Subsea7 Secures Contract to Service Woodside's Trion
- These Factors Helped Brent Oil Price Break Above $85
- Imperial Pipeline in Winnipeg Goes Offline for Three Months
- Adnoc Inks Supply Deal for Ruwais LNG Project with Germany's SEFE
- Gaz System to Acquire Gas Storage Poland
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension