Husky Energy Chief Executive Rob Peabody told the TD investor conference in Calgary that the oil company has enough pipeline capacity locked in to ship its oil until 2021. Husky photo.
On the sidelines of a Calgary investor conference on Tuesday, Husky Energy chief Rob Peabody said that his company has excess oil pipeline capacity to the United States locked in until 2021.
According to Peabody, Husky has an agreement to ship about 75,000 barrels per day (b/d) on the existing Keystone pipeline and the company also has contracted for space on Enbridge’s Mainline crude pipeline system.
Pipeline and rail bottlenecks along with stiff opposition to new pipeline projects have left a number of Canadian oil producers struggling to get their crude to market in the US.
Struggles to ship landlocked crude have left Canadian oil priced on the market for a wide discount compared to US crudes.
There is some relief on the horizon for Canadian producers. Late last month, Enbridge cleared its final regulatory hurdle when a Minnesota regulator approved a certificate of need for the company to rebuild its aging Line 3 pipeline.
“We’re definitely seeing progress. The innate logic of replacing a pipeline that needs to be replaced is finally being seen by courts,” Reuters reports Peabody said, referring to Line 3.
Peabody was also optimistic that the Trans Mountain pipeline, which will almost triple the capacity of the existing pipeline from Alberta to the BC coast, will be built.
“Every time I see the prime minister, he assures me it’s going to be built, so I believe that it will happen,” Peabody said.
Peabody added that he felt the Keystone XL pipeline was “making good progress.”
After being shelved by former US President Barack Obama in 2015, President Donald Trump signed an executive order reviving the project soon after he took office in 2017. Since then, the project has met with opposition from environmentalists and aboriginal groups.
Peabody said that Husky Energy forecasts it will increase production by 5 per cent each year in the coming five years.
Echoing Peabody, Mark Little, COO for Suncor said “Right now, 100 per cent of our production, including all of the production from Fort Hills (Alberta), we have pipeline access to get to markets”.
The head of Imperial Oil said his company is boosting its refineries capabilities to handle more heavy oil. “The whole objective is to minimize the amount of barrels that are exposed to Alberta and the price discounts,” said Richard Kruger.
Cenovus’ Executive Vice President Al Reid says the oil sands company is waiting for uncertainty over market access to clear before it restarts construction on two deferred projects that have a combined starting capacity of 75,000.