Yahoo Finance Canada Needs More Oil Pipes After Trans Mountain, Tamarack Says
(Bloomberg) -- The expansion of Canada’s Trans Mountain oil pipeline is nearly ready for action after years of delays and billions of dollars in cost overruns.
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But Tamarack Valley Energy Ltd. Chief Executive Officer Brian Schmidt sees a need for even more export capacity in the long run as drillers ramp up output from newer fields like the Clearwater play his company specializes in.
The expanded Trans Mountain line — scheduled to start commercial operations in less than two weeks — protects Alberta’s growing heavy-oil production from the steeper discounts it would have sold at had it needed to move on rail, Schmidt said in an interview last week. But the Canadian oil sector could expand further if it had more pipeline capacity, with an Indigenous-led project allowing more access to the Pacific Coast as the ideal scenario, he said.
Trans Mountain is “a good stopgap, but I also think that we need more capacity in the future to satisfy the growth,” Schmidt said on the sidelines of the Bank of Montreal and Canadian Association of Petroleum Producers Energy Symposium in Toronto. “My belief is that First Nations will drive that process if there is going to be a another pipeline to the West Coast.”
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Tamarack Valley gets the bulk of its output from Alberta’s Clearwater formation, which can be tapped with conventional gear and produces heavy crude at much lower costs than the region’s oil sands. The company built up its position in the area largely through acquisitions, including the $1.13 billion purchase of Deltastream Energy Corp. in 2022.
The play — which saw a rush of investment in 2017, making it decades newer than Alberta’s oil-sands deposits — still isn’t mature and has multiple layers that can be tapped, providing plenty of opportunity for increased production, Schmidt said.
“There’s lots of different zones there to explore for,” he said. “So there’s a lot of running room in the play.”
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