Page 5 - NorthAmOil Week 34 2021

NorthAmOil COMMENTARY NorthAmOil

The oil sands region
will benefit from the
upcoming start-up
of Enbridge’s Line 3
replacement pipeline.

shareholders, with any growth coming from tolls could be effective as of September 15. The
small expansions at existing assets. Meanwhile, pipeline is then expected to be brought into ser-
Suncor Energy has said it would be prioritising vice sometime in the fourth quarter of this year.
value over volume until 2025. And even CNRL’s The replacement will roughly double the
planned rise in spending is comparatively mod- capacity on Line 3 from 370,000 barrels per
est. Nonetheless, it does appear that the com- day to 760,000 bpd. And its start-up will be
pany is among those trying to take advantage of followed by the launch of the Canadian gov-
a better operating environment, however long ernment-owned Trans Mountain expansion,
it lasts for. targeted for December 2022. That project will
result in capacity on the Trans Mountain system
Takeaway boost almost tripling from 300,000 bpd to 890,000
The oil sands are set to receive a further boost bpd.
as Enbridge’s Line 3 replacement pipeline Building major new pipelines has become
approaches start-up later this year, significantly increasingly challenging owing to local, political Building major
raising takeaway capacity from the region for the and environmental opposition, as well as com-
first time in years. plicated regulatory approval processes. Indeed, new pipelines
The project has experienced various delays, the third large pipeline project planned for the has become
regulatory hurdles and legal challenges, but has carrying oil sands crude, Keystone XL, met its
now reached its final stages prior to start-up. It demise earlier this year after US President Joe increasingly
received further good news this week when the Biden revoked its cross-border permit immedi-
Minnesota Supreme Court declined to hear an ately upon taking office. challenging
appeal by opponents of the pipeline, allowing Thus for the oil sands, seeing two out of three
for the project’s approval in the state to stand. major pipeline projects reaching completion owing to local,
This leaves the Line 3 replacement’s opponents in the near future will mark a significant mile- political and
with dwindling options, even though they are stone. And even though leading producers have
expected to keep trying to halt the project right turned away from large new oil sands projects environmental
to the point of its entry into service. and are focusing instead on smaller expan-
Enbridge, for its part, is preparing to start up sions of existing facilities, the significant boost opposition.
the pipeline. The company confirmed last week in takeaway capacity gives them further room
that it had filed procedural regulatory docu- to grow. They may be proceeding with relative
ments with the Canada Energy Regulator (CER) caution in the face of uncertainties related to
and the US Federal Energy Regulatory Com- the energy transition, Canada’s carbon tax and
mission (FERC) to allow for tolling surcharges growing pushback from the public and inves-
on the Line 3 pipeline to take effect within 30-60 tors, but it will not be surprising if they want to
days. Enbridge told the Financial Post that the ramp up output in the nearer term.™

Week 34 26•August•2021 www. NEWSBASE .com P5