Pipeline capacity and heavy oil markets

Aspects of transporting heavy crude to markets from Canadian sources are discussed, with reference to pipeline expansion, western Canadian crude supply, and exports to various Petroleum Administration for Defense Districts (PADDs) in the USA. Pipeline expansions have been proposed by Interprovincial Pipeline, Trans Mountain Pipeline, Rangeland, and Wascana, and some of these proposals are in the review stage. Western Canadian crude supply is expected to peak at 1.9 million bbl/d in 1996. An increase in heavy crude supply is expected but this increase will not be sufficient to offset a decline in light crude supply. Adequate pipeline capacity should exist with the Interprovincial expansion volume of 170,000 bbl/d and the Trans Mountain expansion of 38,000 bbl/d forecast to be in place by 1995. Canadian crude exports to the USA have steadily increased since 1989, and heavy crude exports have grown an average of 20,000 bbl/d each year. In PADD Region IV, oil production is declining and ca 20,000 bbl/d of heavy crude will be needed by the year 2000; additional pipeline capacity will be required. In PADD Region II, Canadian heavy crude imports are ca 390,000 bbl/d and further market opportunities exist, after the Interprovincial expansion is complete. When the various combinations of possible pipeline expansions or reversals are considered, a range of heavy crude near-term growth potentials is obtained in which Canadian heavy oil would displace offshore heavy oil supplied to USA refineries. This potential is seen to range from 35,000 bbl/d to 200,000 bbl/d. 7 refs., 20 figs., 3 tabs