Enbridge CEO says Canada only needs two more export pipelines

Sat Mar 11, 2017 4:14pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

(This March 10 story corrects figure for surge in capacity to million, not billion, in fourth paragraph)

By Nia Williams

CALGARY, Alberta (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 (ENB.TO: Quote) 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 KMI.N Trans Mountain expansion last November, while U.S. President Donald Trump invited TransCanada (TRP.TO: Quote) 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.   Continued...

 
Al Monaco, President and CEO, Enbridge, stands when introduced during the Enbridge Income Fund annual general meeting for shareholders in Toronto May 6, 2015. REUTERS/Peter Power