From  Financial Post

Canadian Natural Resources Ltd., Cenovus Energy Inc., Imperial Oil Ltd. and Suncor Energy Inc. are expected to be the primary beneficiaries of the Canadian government’s approval of Kinder Morgan’s Trans Mountain pipeline and Enbridge’s Line 3 replacement program, BMO Capital Markets said in a new report.

The projects are expected to improve market access for all Canadian oil producers and reduce their transportation costs, particularly when compared to rail.

When the pipelines come into service (slated for 2019), BMO analyst Randy Ollenberger believes Canadian heavy oil prices could get a boost.

The Trans Mountain expansion would increase capacity to 890,000 barrels per day (from 300,000), and the Line 3 replacement would restore capacity to 760,000 bpd (from 390,000).

Ollenberger estimates that available crude oil supply could exceed available pipeline capacity by more than 400,000 bpd by the end of 2017, and to more than 566,000 bpd by the end of 2018.

“Given the fact that the existing pipeline capacity exiting Western Canada is essentially fully utilized, we expect a corresponding increase in deliveries of crude oil by rail over this period,” the analyst said in a research note.

 


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