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“It’s kind of insurance,” Skolnick said. “It’s not perfect. It would be perfect if it was 1.2 million bpd from Edmonton or Hardisty down to Louisiana.”
Calgary-based TC Energy Corp. has been building the 830,000-bpd Keystone XL pipeline project, described as a “bullet line” between Alberta and Texas.
KXL company spokesperson Terry Cunha said the project “has been fully contracted short of the minimum capacity required by regulators to be set aside for walk-up shippers.”
It’s not perfect. It would be perfect if it was 1.2 million bpd from Edmonton or Hardisty down to Louisiana
Phil Skolnick, Eight Capital
The Alberta government, which invested in the Keystone XL project and provided loan guarantees for construction costs next year, did not respond to a request for comment.
Oil producers have committed to binding contracts on Keystone XL, which incoming U.S. president Joe Biden threatened to kill during the election campaign.
Altogether, the Line 3 and Southern Access expansions will add roughly 370,000 bpd of pipeline capacity for Western Canadian producers shipping crude to the U.S.
However, Enbridge’s Yu said that once Line 3 and Southern Access are operational, the company plans to optimize its entire Mainline system — and believes it can further expand the system’s capacity.
“We can probably optimize by another 200,000 to 300,000 barrels per day. That’s about what types of crude we put on which pipelines and how we maximize the pumping capacity on all five (Mainline network) pipelines,” he said. “We can do all of this without needing to invest any further capital or get more permits.”
Enbridge already operates the Flanagan South and Seaway Twin pipelines, which ship oil from the U.S. Midwest to the U.S. Gulf Coast.
At Enbridge’s most recent investor day, the company said it was looking to capture more of the market for shipping crude to the Gulf Coast.
Asked whether the company’s Line 3 and Southern Access projects were parts of that strategy, Yu said the route could provide more “egress” for Canadian oil producers.
“It could be a partial mitigation to other pipelines if they don’t go forward,” he said.
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