Trans Mountain expected to increase Canadian oil prices for the foreseeable future

Calgary-based Meg Energy Corp. is optimistic about the future of Canada’s oil industry following the official opening of the expanded Trans Mountain pipeline on May 1. The company predicts that oil producers will benefit from better prices for years to come as the industry starts utilizing the pipeline.

However, Meg Energy also foresees that the pipeline will reach its capacity within five years, with no immediate plans for another pipeline construction in the near future. Vice-president of marketing Erik Alson mentioned on a conference call that the industry has a history of filling available egress, and they expect this trend to continue over time.

The 1,150-kilometre pipeline, owned by the federal government’s Trans Mountain Corp., is part of an expansion project that twins an existing line built in 1953 connecting Alberta and British Columbia. Together, the two pipelines are expected to deliver about 890,000 barrels of oil per day.

Other oil producers, such as Cenovus Energy Inc. and Canadian Natural Resources Ltd., have also expressed their optimism about the pipeline’s potential to improve conditions for Canadian companies. Meg Energy CEO Darlene Gates stated that the Trans Mountain expansion would reduce pricing differential volatility and improve the company’s gross profit per barrel.

Despite the challenges faced during the construction of the pipeline, including cost revisions and protests from environmentalists, the completion of the project marks a significant milestone for the Canadian oil industry. The industry is now looking towards a future where the pipeline will play a crucial role in enhancing the country’s oil export capabilities.