Alberta Posts Record Oil Production

Alberta produced a record amount of crude oil in November last year, with the daily average topping 4 million barrels.

As the larger Trans Mountain pipeline nears completion, oil sands producers in Canada’s oil province ramped up production by more than 330,000 barrels daily to a total of 4.16 million bpd, in November, Bloomberg reported, citing data from the Alberta Energy Regulator.

The Trans Mountain pipeline will, after its expansion, be able to carry 590,000 bpd more in crude oil than it did before the expansion, which will raise the total capacity of the pipeline to 890,000 bpd. However, it has to be completed first, and for that to happen the Canadian authorities would need to approve a change in the construction plan.

The government-owned Trans Mountain company requested regulators allow it to install a pipeline with a smaller diameter on a short section of the expanded pipeline after coming across difficult drilling conditions, Reuters reported earlier this month.

In response, the Canada Energy Regulator scheduled a hearing for today so Trans Mountain can elaborate on the reasons for this request. The CER had previously rejected the request, citing inadequate addressing of concerns related to pipeline integrity and the environment.

Alberta oil majors are already planning further production expansion in anticipation of the Trans Mountain project’s completion. Last month, Canadian Natural Resources said it eyed an output expansion of some 40,000 barrels of oil equivalent daily this year. Cenovus is also investing in production growth.

Analysts expect tie-backs to existing oil sands facilities or expansion of operational sites by some of the biggest Canadian oil firms to boost Canada’s crude oil production by 8% by 2025. 

Trans Mountain should start transporting crude by the end of the first quarter of the year, but according to the company, the start could be delayed by two months, depending on the CER’s decision.

By Charles Kennedy for Oilprice.com

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