How 4 different expansions are planned for Canada's largest oil export pipeline system

A handful of proposed expansions to major pipelines in the country could noticeably increase the amount of oil that can be exported out of Western Canada. In total, they add up to the equivalent to constructing a large brand new pipeline.

Enbridge is proposing four different expansions to its pipeline system, which is the largest in the country. 

The Calgary-based company announced a final investment decision on Friday to proceed with the first phase, which will cost $1.4 billion US to add 150,000 barrels per day of capacity on its Mainline system and an additional 100,000 barrels per day to its Flanagan South pipeline. The project should be completed in 2027.

"We see supply kind of gradually growing," and these pipeline expansions are meeting that need, said Colin Gruending, Enbridge's president of liquids pipelines, while speaking to reporters on Friday.

These proposals come at a time when Alberta is pursuing its own pipeline project and there are renewed discussions about resurrecting the failed Keystone XL pipeline.

There are also concerns about pipelines filling up completely in the next few years, as oil production continues to rise to new record highs. When export pipelines reach their capacity, there can be an oil backlog, causing prices for Canadian crude to fall and lowering royalties for governments.

Meanwhile, Trans Mountain is proposing two different improvements to its pipeline from Edmonton to a Vancouver-area port. The pipeline's physical size won't change, but the Crown corporation is exploring using drag-reducing agents to increase the amount of oil that can be transported. A second project would look at building stronger pumping stations to push more oil through the pipe.

All combined, there shouldn’t be any concern of export limitations, said Gruending, even as oil companies keep producing more oil in Alberta.

“The way we see the base case kind of unfolding is a combination of Enbridge optimizations and Trans Mountain optimizations. We’ll take care of that,” he said. “We think that should do it. And it's totally OK to have a little more egress than supply.”

Down the road, more improvements are always a possibility, he said.

“We have further optimizations to take care of that, like we have for 75 years. I think we've expanded the system hundreds of times."

Currently, the country’s export pipelines are filling up and could max out by fall of 2028, according to a recent report by TD Cowen. However, improving existing pipelines could create spare export capacity for several more years.

“Expedited pipeline expansions could push this into the mid-2030s, but timelines already feel tight and visibility remains low,” the TD Cowen report states.

All the expansions add up to more than one million barrels per day of additional shipping capacity, according to the TD Cowen report.