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Canada pipeline nears completion, ups Asia, US exports

Big news from Canada! The Trans Mountain pipeline is almost done – like 95% there!  It's a huge deal because it's going to make the pipeline three times bigger. We're talking about pumping up the capacity to 890,000 barrels a day!, so, what's the plan?

Expansion progress: Canada's ambitious Trans Mountain pipeline expansion is nearing completion, with over 95% of the work already done. This significant milestone reflects Canada's commitment to enhancing its crude oil export capabilities.

Capacity boost: according to EIA, the expansion is set to transform the pipeline's functionality, elevating its capacity from 300,000 to 890,000 barrels per day (b/d). This near tripling of capacity will enable the transportation of crude oil from Alberta's tar sands to various international markets, including Asia and the west coast of the United States.

Current status and challenges: Initially expected to be operational early this year, the project faces a potential delay. The Trans Mountain Corporation (TMC), formed following the Canadian government's acquisition of the pipeline from Kinder Morgan in 2018 for C$4.5 billion, is navigating through a recent decision that could postpone the project's completion by up to two years.

Existing pipeline role: The current Trans Mountain pipeline plays a crucial role in Canada's oil export, connecting Edmonton, Alberta, to Burnaby, British Columbia. The expansion aims to add 590,000 b/d to the existing capacity, thereby significantly boosting Canada's export potential.

Canadian oil production trends: Over the past 13 years, Canada's crude oil production has seen a steady rise, with an increase of nearly 2.0 million b/d from 2009 to 2019. The COVID-19 pandemic briefly impacted this growth, but production bounced back in 2022, surpassing pre-pandemic levels with an average production of 4.9 million b/d.

Alberta's dominance: Alberta remains the epicenter of Canada's crude oil production, contributing 82.7% to the country's total output in 2022. This figure marks a significant increase from 76.1% in 2012, underscoring Alberta's growing importance in the national oil industry.

Canada-U.S. oil trade: The United States remains the largest recipient of Canadian crude oil, with imports averaging around 3.7 million b/d since 2020. These imports account for approximately 79% of Canada's total crude oil production, with the U.S. being the largest importer of Canadian oil.

Regulatory setbacks: The Canada Energy Regulator's (CER) recent decision on Dec. 5 to deny a variance request for the Trans Mountain project is a key factor in the potential delay. This decision has prompted Trans Mountain to anticipate a delay of up to two years in the project's timeline.

Trans Mountain Pipeline over 95% complete in Canada
Trans Mountain Pipeline over 95% complete in Canada

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