Bayman Texan Energy Corp.

Pipeline Infrastructure


The expansion of pipeline capacity to the U.S. Midwest has contributed to a narrowing of heavy oil differentials. In 2010, two significant pipeline projects were completed: the Alberta Clipper and Keystone pipelines. The Alberta Clipper pipeline is a crude oil pipeline that provides service between Hardisty, Alberta, and Superior, Wisconsin. Initial capacity is 450,000 bbl/d. The first phase of the Keystone pipeline system is a bullet line that transports crude oil from Canada to market hubs in the U.S. Midwest. Initial pipeline capacity on Keystone was approximately 435,000 bbl/d and then increased to 591,000 bbl/d in February 2011 upon completion of the pipeline expansion to Cushing, Oklahoma. While these pipelines have helped in transporting Canadian crude to market, we have, as a result of increased crude oil production, been experiencing a product buildup in the U.S. Midwest.  Meanwhile, there has been increasing demand for heavy crude in the U.S. Gulf Coast.

The proposed Keystone Gulf Coast Expansion Project ("Keystone XL") would transport additional Canadian crude oil to the U.S. Gulf Coast and bring total Keystone pipeline capacity to 1.1 million bbl/d.  While Keystone XL approval has been delayed, prolonging startup to 2015 at the earliest, Enbridge has continued expansion plans with several debottlenecking projects which are expected to open up 1.7 million bbl/d of new markets through 2016.

Further to the announced plans to increase pipeline capacity to the U.S. Gulf Coast, Enbridge is also planning to expand crude transport capabiltiy to the Canadian Pacific Coast, for transport to Asian markets via their Northern Gateway pipeline project. Enbridge's current timeline calls for an in-service date beyond 2016. This proposed pipeline would have a capacity of 525,000 barrels per day. For transport to the Canadian Eastern Coast, TransCanada is planning the Energy East Pipeline, which will have an initial capacity of 525,000 bbl/d, expandable to approximately 850,000 bbl/d.  This pipeline consists of two segments: the Hardisty-Quebec system, targeted for late 2017 and the New Brunswick Extension, targeted for mid-2018.  Together with industry plans to provide increased access for Canadian crude to the major U.S. Gulf refining complex, these coastal-bound pipelines would ensure outlets and value for Canada's western crude oil exports. 

CAPP Pipeline Map Source: Canadian Association of Petroleum Producers "Crude Oil Forecast, Markets and Pipeline Report", June 2014

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