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Alberta's oil sands and the promising future with TMX Pipeline

Alberta's growing oil sands production is testing the limits of current pipeline capacity.

However, the upcoming Trans Mountain Expansion (TMX) pipeline, set to start operations in Q2 2024, promises to change the situation. This expansion will enable the movement of oil from new upstream investments.

Oil sands operators like Suncor are adopting a strategy of connecting existing assets to share facilities, with Suncor's 350,000 b/d Base Plant being a prime example. Similarly, Cenovus is integrating its Narrows Lake project with its Christina Lake asset, aiming to increase heavy sour crude production by 80,000 b/d by 2026.

Canadian Natural Resources (CNRL), the country's largest oil producer, continues to set production records, anticipating the TMX pipeline. TMX will not only enhance the existing 300,000 b/d line but also reach larger docks near Vancouver, significantly increasing export capacity.

"We'll fill this pipeline and, I think, sooner than most people think," Cenovus chief executive Jon McKenzie says, reporting Argus. Spare capacity has all but vanished only two years after pipeline operator Enbridge's Line 3 replacement project added 370,000 b/d of egress to the US midcontinent.

Canadian TMX Pipeline passes through Alberta
Canadian TMX Pipeline passes through Alberta

Beyond Alberta: The Rise of Montney Shale and Advancements in Canadian TMX Pipeline

Beyond Alberta, the Montney shale, spanning British Columbia and Alberta, is gaining attention. This liquids-rich resource is becoming a key focus, drawing investments from various companies. Crescent Point, for instance, has become the largest landowner in the Montney area with significant investments this year.

On the infrastructure front, TC Energy's Coastal Gaslink project, mechanically complete, will feed into LNG Canada's export terminal, showing the rising importance of Canadian natural gas on the global stage.

Crescent Point, based in Calgary, has invested heavily in Montney, spending C$4.25 billion this year and becoming the largest landowner in the area. Other companies like Tourmaline and Strathcona have also increased their stakes in Montney.

Meanwhile, TC Energy's Coastal Gaslink project in British Columbia has reached mechanical completion. It's set to transport substantial volumes of gas to Kitimat, feeding into LNG Canada's export terminal, which is expected to commence operations mid-decade. This project has significant Asian investment, indicating broad international interest in Canadian natural gas. Additionally, Coastal Gaslink may integrate with Pembina's Cedar LNG terminal, pending a final investment decision.

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