2009 CAPP Crude Oil Forecast Markets

Crude Oil Forecast, Markets & Pipeline Expansions 1
June 2009
Crude Oil
Forecast, Markets & Pipeline Expansions
2 CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS
Crude Oil Forecast, Markets & Pipeline Expansions i
EXECUTIVE SUMMARY
For several years, the forecasted growth in Canadian crude oil supply, primarily due to the development of the Alberta oil sands,
led industry to conclude there was an urgent need for additional pipeline capacity to connect to new and expanded markets.
Growth in crude oil supply is still being forecast; only at a slower rate than previously anticipated. While access to markets
remains an important consideration for producers, the need for additional pipeline capacity has been tempered by a lower
outlook for supply growth and signicant new pipeline capacity now underway.
On average, current oil prices are signicantly lower than in recent years. The economic downturn in major market areas has
also impacted the industry and the global nancial crisis has hindered the ability of companies to acquire investment capital.
In line with a lower forecasted growth in crude oil supply, a lower growth in market demand is also anticipated given the
economic downturn and the fact that renery conversions and expansions are proceeding at a slower pace.
Conventional Heavy
Conventional Light
Pentanes
Oil Sands Growth
Oil Sands Operating & In Construction
0
1,000
2,000
3,000
4,000
5,000
thousand barrels per day
Actual Forecast
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
June '08 Moderate
Growth Forecast
Atlantic Canada
Canadian Oil Sands & Conventional Production
Canadian Crude Oil Production
and Supply
CAPP conducted a survey of oil sands producers in early
2009 to determine their plans for production of both
bitumen and upgraded crude oil for the period from 2009
to 2025. From this data, CAPP has prepared a Growth
Case and an Operating & In Construction Case. The
Growth Case represents the expected outlook, which
assumes the current investment climate will improve
over time. The Operating & In Construction Case, a more
conservative outlook, only includes projects that are
currently in operation or are under construction. As such,
this latter case represents a minimum potential growth
outlook from the oil sands. The forecast for Canadian
crude oil production under both cases is shown in the
following table.
Canadian Crude Oil Production
million b/d 2008 2015 2020 2025
Growth 2.72 3.29 4.00 4.17
Operating & In
Construction
2.72 3.02 3.03 2.84
In the Operating & In Construction Case, production is
forecast at only 2.8 million b/d by 2025 due to the decline
in conventional production. Although conventional
production as a whole is expected to decline gradually,
this rate of decline is offset somewhat by an increase
in light crude oil production from the Bakken eld in
Saskatchewan, which is expected to exhibit strong
growth in the next few years. Later in the forecast,
the Hebron heavy oil project in Atlantic Canada is
expected to come on stream by 2017.
ii CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS
Crude Oil Markets
CAPP also surveyed reneries in Canada and the U.S. to
obtain information on their current capability and plans to
process additional volumes of western Canadian crude oil.
This information is intended to help industry gain a better
understanding of the potential markets for the expected
growth in oil sands supply, and in turn, assist the industry
in the evaluation of pipeline projects connecting supply to
these potential markets.
Based on the survey results, the potential demand for
Canadian crude oil in most markets is relatively at.
However, the U.S. Midwest is expected to take more
western Canadian crude oil, as a result of a number of
planned renery expansions and conversions to process
heavier crude oil. The U.S. Gulf Coast is considered a
market with signicant potential given its large rening
capacity and the ability of many of these reners to
process heavy crude. Also, the steep decline in Mexicos
production and Venezuelas recent shift towards exporting
oil to non-U.S. markets such as China, are factors that
could make securing supply from Canada more attractive
in the future. The full potential of this market remains
uncertain at this stage, however, given limited pipeline
access to this region from western Canada.
Crude Oil Pipelines and
Expansions
The major pipeline projects that are currently under
construction will add over one million b/d in pipeline
capacity exiting western Canada by the end of 2010.
A corresponding growth in supply of one million b/d is not
expected to occur until 2016. Current pipeline capacity
underway or in the regulatory process will provide excess
capacity for a number of years and sufcient pipeline
capacity available exiting Western Canada throughout the
forecast period.
There are numerous pipeline project proposals presented.
However, many of these proposals were developed in
response to earlier expectations that additional capacity
was required to meet more rapid growth in oil sands
production than is currently being forecast. Given the
current supply outlook and market conditions, the timing
of most of these pipeline proposals has been delayed.
PADD II
PADD I
PADD V
PADD III
68 [74]
89 [380+]
3,746
1,155 [2,005]
482 [547]
623
2,708
Non-US
8
149 [171]
230 [253]
Supply
2008 - 2,436
2015 - 3,308
1,796
8,378
398
PADD IV
255 [257]
612
2009 Total Refining Capacity
2008 Actual
Demand
Additional Demand
- 2015 Potential
Market Demand for Western Canadian Crude Oil Actual 2008 vs 2015 Potential thousand barrels per day
Crude Oil Forecast, Markets & Pipeline Expansions iii
Canadian & U.S. Crude Oil Pipelines All Proposals
Portland
Montreal
Sarnia
Buffalo
Philadelphia
Toledo
Lima
Chicago
Patoka
Cushing
St. Paul
Salt Lake City
St. James
Houston
Edmonton
Anacortes
Burnaby
TransCanada Keystone
BP/Enbridge GAP
Phase 1
BP/Enbridge GAP
Phase 2
BP/Enbridge GAP
Phase 3
Altex
Enbridge Southern Access Expansion
Enbridge Southern Access Extension
TransCanada
Louisiana Access
Mustang Expansion
Enbridge Alberta Clipper
Trans
Mountain
BP
Enbridge
Mid Valley
Capline
Flanagan
Wood
River
Hardisty
Centurion Pipeline
ExxonMobil/Enbridge
Pegasus Expansion
Enbridge Spearhead
Expansion (North)
Express
Platte
Guernsey
Enbridge Gateway
1
Kinder Morgan
TMX2 Expansion
TMX3 Expansion
2
3
Kinder Morgan
TMX Northern Leg
5
6
Enbridge (North Dakota) Expansion
9
TransCanada
AB-USGC
Keystone XL
8
TransCanada
AB-California
7
22 Sunoco to USGC 21
23
18
10
15
4
Enbridge Ohio Access 16
Sunoco to Toledo
19
14
13
12
11
Sunoco
Buffalo to Philadelphia
20
17
Enbridge Trailbreaker
Portland Pipeline Reversal
17
Canadian & U.S. Crude Oil Pipelines All Proposals
iv CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS
TABLE OF CONTENTS
EXECUTIVE SUMMARY i
LIST OF FIGURES AND TABLES v
1 INTRODUCTION 1
2 CRUDE OIL PRODUCTION AND SUPPLY FORECAST 2
2.1 Canadian Crude Oil Production 2
2.2 Western Canadian Crude Oil Production 3
2.2.1 Oil Sands 3
2.2.2 Conventional Crude Oil Production 5
2.3 Western Canadian Crude Oil Supply 6
2.4 Methodology 7
2.5 Production and Supply Summary 8
3 CRUDE OIL MARKETS 9
3.1 Canada 10
3.1.1 Western Canada 10
3.1.2 Ontario 10
3.1.3 Qubec 10
3.2 United States 11
3.2.1 PADD I (East Coast) 11
3.2.2 PADD II (Midwest) 12
3.2.3 PADD III (Gulf Coast) 14
3.2.4 PADD IV (Rockies) 15
3.2.5 PADD V (West Coast) 15
3.3 Asia 17
3.4 Methodology 17
3.5 Markets Summary 18
4 CRUDE OIL PIPELINES 19
4.1 Major Crude Oil Pipelines 19
4.1.1 Existing Major Crude Oil Pipelines 19
4.2 Crude Oil Transportation Requirements 21
4.3 Crude Oil Pipeline Expansions/Proposals 22
4.3.1 Crude Oil Pipeline Expansions/Proposals to the U.S. Midwest,
Ontario, Qubec and the East Coast 22
4.3.2 Crude Oil Pipeline Expansions/Proposals to the U.S. Gulf Coast 25
4.3.3 Crude Oil Pipeline Expansions/Proposals to the West Coast 27
4.3.4 Other Proposals 28
4.3.5 Diluent Pipeline Proposals 29
4.4 Pipeline Summary 29
GLOSSARY 30
APPENDIX A: Acronyms, Abbreviations, Units and Conversion Factors 32
APPENDIX B: CAPP Canadian Crude Oil Production and Supply Forecast 2009 2025 33
APPENDIX C: Canadian and U.S. Crude Oil Pipeline Expansions/Proposals 37
APPENDIX D: Crude Oil Pipelines and Reneries 39
Crude Oil Forecast, Markets & Pipeline Expansions v
LIST OF FIGURES AND TABLES
Figures
Figure 2.1 Canadian Oil Sands & Conventional Production 3
Figure 2.2 Oil Sands Regions 4
Figure 2.3 Growth Case - Western Canada Oil Sands & Conventional Production 4
Figure 2.4 Operating & In Construction - Western Canada Oil Sands & Conventional Production 5
Figure 2.5 Growth Case - Western Canada Oil Sands & Conventional Supply 7
Figure 2.6 Operating & In Construction - Western Canada Oil Sands & Conventional Supply 8
Figure 3.1 Market Demand for Western Canadian Crude Oil 2008 Actual vs 2015 Potential 9
Figure 3.2 Western Canada: Forecast Western Canadian Crude Oil Receipts 10
Figure 3.3 Ontario: Forecast Western Canadian Crude Oil Receipts 10
Figure 3.4 Petroleum Administration for Defense Districts 11
Figure 3.5 2008 PADD I: Foreign Sourced Supply by Type and Domestic Crude Oil 11
Figure 3.6 2008 PADD II: Foreign Sourced Supply by Type and Domestic Crude Oil 12
Figure 3.7 PADD II (North): Forecast Western Canadian Crude Oil Receipts 12
Figure 3.8 PADD II (East): Forecast Western Canadian Crude Oil Receipts 13
Figure 3.9 PADD II (South): Forecast Western Canadian Crude Oil Receipts 14
Figure 3.10 2008 PADD III: Foreign Sourced Supply by Type and Domestic Crude Oil 14
Figure 3.11 PADD IV: Forecast Western Canadian Crude Oil Receipts 15
Figure 3.12 2008 PADD V: Foreign Sourced Supply by Type and Domestic Crude Oil 16
Figure 3.13 Washington: Forecast Western Canadian Crude Oil Receipts 16
Figure 3.14 2008 PADD V (California): Foreign Sourced Supply by Type and Domestic Crude Oil 17
Figure 4.1 Current Crude Oil Expansions from Western Canada 21
Figure 4.2 Pipeline Proposals to the U.S. Midwest, Ontario and U.S. East Coast 22
Figure 4.3 Pipeline Proposals to the U.S. Gulf Coast 25
Figure 4.4 Pipeline Proposals to U.S. West Coast 27
Figure 4.5 Diluent Pipeline Proposals 28
Tables
Table 2.1 Canadian Crude Oil Production 2
Table 2.2 Western Canadian Crude Oil Production 3
Table 2.3 Western Canadian Crude Oil Supply 6
Table 3.1 Summary of Major Announced Renery Upgrades in Eastern PADD II 13
Table 3.2 Summary of Major Announced Renery Upgrades in PADD III 15
Table 3.3 Total Oil Product Demand in Major Asian Countries 17
Table 4.1 Approved Oil Pipeline Expansions from Western Canada 21
INTRODUCTION
Historically, CAPP has prepared an annual Canadian crude oil production and
supply forecast to provide industry and the general public with a view of the
long-term outlook for Canadian production trends and available supply to
markets. Beginning in 2007, CAPP expanded the report to include a synopsis
on the potential markets for this crude oil supply in an attempt to capture and
summarize the market choices available to industry participants as they evaluate
proposed pipeline expansions or new pipeline projects.
1
For several years, the forecasted growth in Canadian
crude oil supply, primarily due to the development of the
Alberta oil sands, led industry to conclude that there was
an urgent need for additional pipeline capacity to connect
to new and expanded markets. Growth in crude oil supply
is still being forecast; only at a slower rate than previously
anticipated. While access to markets remains an important
consideration for producers, the need for additional
pipeline capacity has been tempered by a lower outlook
for supply growth.
Over the past 12 months, the industry has witnessed
a dramatic change in oil prices. The benchmark WTI
crude oil price dropped from a peak in July 2008 of
over US$140 per barrel to less than US$40 per barrel
by year-end. On average, current prices are signicantly
lower than in recent years. The economic downturn in
major market areas has also impacted the industry and
the global nancial crisis has hindered the ability of
companies to attract investment capital.
CAPPs estimate of industry capital spending for oil sands
development was reduced to $10 billion dollars for 2009
compared to $20 billion in 2008.
The forecast for market demand growth is also lower
than in the previous report, which is in line with the lower
forecasted growth in supply. As a result, many pipeline
proposals have been deferred but remain as options that
could respond to future market needs.
The outline of the report is as follows:
Chapter 1 provides an introduction to the report
Chapter 2 discusses the latest crude oil production
and supply forecast
Chapter 3 summarizes the major potential crude
oil markets
Chapter 4 describes the existing major crude oil pipeline
network and proposed expansions
CAPP conducted a survey of oil sands producers in early
2009 to determine their planned production of bitumen and
upgraded crude oil for the period from 2009 to 2025. These
results were subsequently adjusted to reect: the historical
performance trends of oil sands projects following start
up, the status of projects, and potential labour and capital
constraints. The majority of oil sands projects, particularly
in situ, are executed in multiple phases. Historically, in situ
projects require some time to ramp up to capacity while
new mining projects typically require some ne tuning
before full capacity is maintained on a consistent basis.
From this data, CAPP has prepared a Growth Case,
representing the expected outlook which assumes the
eventual return of higher oil prices and investment activity.
In addition, a lower forecast has also been prepared using
the same risk factors but includes only projects currently in
operation or under construction. This latter case represents
a minimum potential growth from the oil sands.
2.1 Canadian Crude Oil Production
Western Canadian crude oil production averaged
2.4 million b/d in 2008 and is projected to grow signicantly
over the forecast period due to development of the oil
sands. On the conventional side, both light and heavy
production in the WCSB is declining. Production in Atlantic
Canada is expected to grow in 2017 with the expected
start of production from the Hebron heavy oil project.
In 2008, production in Atlantic Canada was 342,000 b/d,
which accounted for about 13 percent of total Canadian
crude oil production of 2.7 million b/d.
Table 2.1 Canadian Crude Oil Production
million b/d 2008 2015 2020 2025
Growth 2.72 3.29 4.00 4.17
Operating
& In Construction 2.72 3.02 3.03 2.84
Table 2.1 shows the forecast for Canadian crude oil
production under the Growth Case and the Operating
& In Construction Case. In the latter case, production is
forecast at only 2.8 million b/d by 2025 due to the decline
in conventional production (Figure 2.1).
CRUDE OIL PRODUCTION
AND SUPPLY FORECAST
2
According to the Oil and Gas Journal, Canada has total proven oil reserves of over
178 billion barrels. The two major oil producing areas in Canada are the Western
Canada Sedimentary Basin (WCSB) and Atlantic Canada. While CAPP has
included a forecast of production from Atlantic Canada in this report, the primary
focus will be on production from Western Canada since most of the growth in oil
production is expected to be derived from the oil sands areas located primarily in
the western province of Alberta.
2.2 Western Canadian Crude
Oil Production
In 2008, over 87 percent of all Canadian crude oil
production came from Western Canada.
Western Canadian crude oil production is comprised
of conventional oil and oil sands production. In 2006,
oil sands production reached over 1.1 million b/d and
surpassed conventional crude oil production for the
rst time. Table 2.2 shows the forecast for total western
Canadian crude oil production in both cases.
Table 2.2 Western Canadian Crude Oil Production
million b/d 2008 2015 2020 2025
Growth 2.38 3.16 3.78 4.05
Operating & In
Construction 2.38 2.89 2.81 2.72
2.2.1 Oil Sands
The three main oil sands deposits are located in the Peace
River, Athabasca and Cold Lake areas in the province
of Alberta (Figure 2.2). The Alberta Energy Resources
and Conservation Board (ERCB) has designated three
geological zones for the major oil sands areas and
estimated that these areas contain an ultimate recoverable
resource of 315 billion barrels, with remaining established
reserves of 173 billion barrels at year-end 2007. There are
also smaller deposits in northwest Saskatchewan, next
to the Athabasca oil sands deposit. The Saskatchewan
Ministry of Energy and Resources has estimated 2.7 million
hectares of potential land but the resource base has not
been ofcially determined.
Bitumen is produced from the oil sands by mining and
extraction, in situ thermal recovery and in situ non-thermal
recovery. In areas where the oil is located near the surface,
open-pit mining is the most efcient method. However,
to recover oil that is located further below the surface, in
situ techniques are employed. Common in situ thermal
extraction techniques include Steam Assisted Gravity
Drainage (SAGD) and Cyclic Steam Stimulation (CSS).
Of the remaining established reserves, 142 billion barrels,
or 82 percent, is considered recoverable by in situ methods
and 31 billion barrels from surface mining.
Conventional Heavy
Conventional Light
Pentanes
Oil Sands Growth
Oil Sands Operating & In Construction
0
1,000
2,000
3,000
4,000
5,000
Actual Forecast
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
June '08 Moderate
Growth Forecast
Atlantic Canada
Figure 2.1 Canadian Oil Sands & Conventional Production
Figure 2.2 Oil Sands Regions
Oil sands production currently makes up just over half of
western Canadas total crude oil production. It is expected
to grow from over 1.2 million b/d in 2008 to approximately
2.2 million b/d in 2015 and to about 3.3 million b/d in 2025 in
the Growth Case (Figure 2.3). The Growth Case is based on
the assumption that oil sands projects will be developed and
brought into service gradually, at a pace similar to historical
and current trends. Historically, in situ projects require time
to ramp up to capacity while new mining projects typically
require some ne tuning before capacity is maintained on
a consistent basis.
In 2008, 629,000 b/d was mined, which is slightly over
half of the total oil sands production. Currently, all mined
bitumen is upgraded as part of an overall integrated
operation. This trend of upgrading mined bitumen is
expected to continue throughout the forecast period
for most projects. Production from the upcoming Kearl
mining project could be processed at Imperial reneries in
Alberta or processed at other upgraders in Alberta.
In contrast, the majority of in situ bitumen production is
currently not upgraded prior to transporting it to market.
Suncors Firebag production is the exception. One recent
example, however; of an operating in situ project coupled
with upgrading is the Long Lake project operated by Nexen
Inc. It produced its rst upgraded crude oil at the end of
January 2009.
Proponents of many of the oil sands projects that were
included in the last report have since announced project
delays until a time when they believe that their investment
can generate a high enough rate of return. On one side of
the equation, low oil prices and more difculty in attracting
investment capital have a negative impact on project
economics. On the other hand, supply costs for projects are
starting to decrease gradually with lower estimates for labour,
materials and equipment.
0
1000
2000
3000
4000
5000
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Actual Forecast
In Situ
Mining
Conventional Heavy
Conventional Light
Pentanes
June '08 Moderate
Growth Forecast
0
1,000
2,000
3,000
4,000
5,000
Edmonton
Calgary
Lloydminster
Peace
River
Fort
McMurray
Area of
Potential
Athabasca
Deposit
Cold Lake
Deposit
Peace River
Deposit
Figure 2.3 Growth Case - Western Canada Oil Sands & Conventional Production
The integrated mining projects in operation are listed below
in chronological order:
The Suncor Steepbank and Millennium Mine;
The Syncrude Mildred Lake and Aurora Mine;
The Athabasca Oil Sands Project (AOSPj, which is a
joint venture between Shell, Chevron and Marathon Oil;
and
The CNRL Horizon Project, which produced its frst oil
in February 2009.
The expansions by Shell and Syncrude and the Imperial
Kearl Lake project are the three major mining projects
currently under construction.
In the Operating and In Construction Case, oil sands
production is expected to grow from over 1.2 million b/d in
2008 to approximately 1.9 million b/d in 2015 and to about
2.0 million b/d in 2025 (Figure 2.4). Please refer to Appendix B.1
and Appendix B.2 for detailed production forecast data.
2.2.2 Conventional Crude
Oil Production
Conventional crude oil production in western Canada
has been declining since the late 1990s as a result of the
maturity of the basin. By 2025, total conventional crude oil
production is expected to decrease from one million b/d in
2008 to about 589,000 b/d. In 2008, Alberta conventional
light crude oil production was at due to higher oil prices,
which led to higher drilling activity. The Government of
Alberta also announced new, one-year, incentive programs
to stimulate activity in Alberta in March 2009. Overall,
conventional production is expected to gradually decline,
on average, by 4 percent through the forecast period in
Alberta and British Columbia.
Saskatchewan light crude oil production exceeded
expectations by increasing almost 13 percent in 2008. This
growth can be attributed to the higher drilling activity and
production from the Bakken eld. The Bakken oil eld in
south east Saskatchewan is a signicant conventional oil
play in Canada and continues to generate strong interest
as a result of the improved use of existing technology.
However, in a lower oil price environment, the growth in
the near term is expected to be more modest than
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Actual Forecast
0
1000
2000
3000
4000
5000
June '08 Moderate
Growth Forecast
In Situ
Mining
Conventional Heavy
Conventional Light
Pentanes
0
1,000
2,000
3,000
4,000
5,000
Figure 2.4 Operating & In Construction - Western Canada Oil Sands & Conventional Production
in recent experience. The decline in heavy crude oil
production in Saskatchewan has been offset somewhat by
the production from the Lower Shaunavon eld.
In Manitoba, production rose 6 percent in 2008. However,
it should be noted that the Sinclair eld, which was
designated in 2005, and was the rst major discovery in
Manitoba in many years, accounted for 30 percent of the
provinces crude oil production. Production is expected to
start declining within the next 2 years as the eld matures.
2.3 Western Canadian Crude
Oil Supply
Of particular interest to market participants is the supply
of actual crude oil types that will be available from initial
production. On a volumetric basis, supply is greater than
production because supply includes pentanes/condensate
volumes that have been imported to supplement the
locally produced volumes of condensate for use as diluent.
Diluent is necessary in order to transport the non-upgraded
bitumen production to market.
The CAPP forecast categorizes the various crude oil types
that comprise western Canadian crude oil supply into four
major categories: Conventional Light, Conventional Heavy,
Upgraded Light and Bitumen Blend. The Bitumen Blend
category includes upgraded heavy sour crude, bitumen
diluted with upgraded light crude oil (also known as
SynBit) and bitumen diluted with condensate (also known
as Dilbit). The most common form of Bitumen Blend
is bitumen blended with a standard condensate such as
pentanes plus, which is mainly recovered from processing
natural gas, to create a type of crude oil that meets pipeline
specications for density and viscosity. An example of
such a Dilbit would be Cold Lake crude oil, which has a
density of about 930 kg/m
3
(21 API) and a sulfur content
of 3.6 percent.
As discussed above, the main source of diluent is natural
gas condensates that are produced in western Canada.
However, this diluent supply has not been sufcient to meet
the needs of growing bitumen production. Companies
imported over 60,000 b/d of diluent into Alberta by rail in
2008. To meet growing demand for diluent, Enbridge is
building the Southern Lights diluent pipeline from Chicago
to Alberta. The pipeline will have an initial capacity of
180,000 b/d and is expected to be in service in July 2010.
Demand for condensate imports will exceed the initial
capacity of this pipeline by 2015 in the Growth Case.
Subsequently, rail and truck imports could be used to
increase the condensate supply available to market in the
interim. Potential longer-term solutions include blending
more upgraded light crude oil with bitumen or the
consideration of additional diluent pipeline options.
It should be noted that this latest forecast incorporates
the fact that fewer companies reported an intention to
use upgraded synthetic crude oil as a source of diluent
this year than in the past. Blending with a traditional
condensate diluent requires a 70:30 bitumen to condensate
ratio. When upgraded light crude is used as the diluent,
the blending ratio is approximately 50:50.
Table 2.3 Western Canadian Crude Oil Supply
million b/d 2008 2015 2020 2025
Growth 2.44 3.31 3.94 4.24
Operating & In
Construction 2.44 3.02 2.95 2.87
Table 2.3 shows the total western Canadian crude
oil supply projections for both cases. Please refer to
Appendices B.3 and B.4 for detailed supply data. In the
Growth Case, upgraded light crude oil supply is projected
to grow from about 564,000 b/d in 2008 to 1.0 million b/d
in 2015 and 1.3 million b/d by 2025. The upgraded light
crude oil supply includes the upgraded light crude oil
volumes produced from:
Upgraders that process conventional heavy oil,
e.g., the Husky Upgrader at Lloydminister and the
CCRL Upgrader in Regina;
lntegrated mining and upgrading projects, e.g., Suncor,
Syncrude and CNRL operations;
lntegrated in situ projects, e.g., the Nexen Long Lake
project;
Offsite upgraders, e.g., the Athabasca Oil Sands
Project; and
Some Merchant Upgraders
Bitumen Blend, which makes up the heavy crude oil
supply from the oil sands, is forecasted to increase from
933,000 b/d in 2008 to 1.6 million b/d in 2015 and up
to 2.4 million b/d in 2025 (Figure 2.5).
Figure 2.5 Growth Case - Western Canada Oil Sands & Conventional Supply
* Bitumen Blend includes some volumes of upgraded heavy sour crude oil and bitumen blended with diluent or ugpraded crude oil.
Actual Forecast
June '08 Moderate
Growth Forecast
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
0
1000
2000
3000
4000
5000
Conventional Light
Bitumen Blend*
Upgraded Light
Conventional Heavy
0
1,000
2,000
3,000
4,000
5,000
In the Operating and In Construction Case, the projected
growth from the oil sands projects can no longer offset the
declines in conventional production by 2015. The supply of
upgraded light crude oil is forecasted to grow from 564,000 b/d
in 2008 to 911,000 b/d in 2015. Bitumen Blend is forecasted
to grow from 933,000 b/d in 2008 to 1.4 million b/d in 2015.
From 2015 to the end of the forecast period, supply of both
upgraded light crude oil and Bitumen Blend is essentially
at. In this Case, there would be sufcient condensate
imports available throughout the forecast period after
the construction of the Enbridge Southern Lights diluent
pipeline (Figure 2.6).
2.4 Methodology
From the survey data, CAPP determined the amount of
upgraded crude oil and bitumen that could potentially be
available to the market. The following key assumptions
have been used to determine available oil sands supply:
a) All bitumen must be blended with either condensate
or upgraded light crude oil prior to being transported
by pipeline.
b) Condensate is the preferred diluent over upgraded light
crude oil.
c) Prior to the in-service of the Enbridge Southern Lights
diluent import pipeline in July 2010, the amount of
western Canadian condensate production plus railed
imports is not sufcient to blend with expected bitumen
production and, therefore, some producers will blend
their bitumen with upgraded light crude oil to meet
pipeline specications.
d) By 2010, Southern Lights imports will provide additional
diluent to western Canadian producers; however, some
producers may continue to use some upgraded crude
oil to blend with bitumen.
CAPP has not surveyed conventional crude oil producers
but has instead relied upon historical trends, recent
announcements and discussions with provincial
government representatives to derive its forecast.
2.5 Production and Supply
Summary
Much has changed over the last year. A number of oil
sands projects have been deferred or cancelled due
to factors including lower oil prices and challenges in
attracting investment capital. CAPPs latest forecast
reects the changed business environment and is
consequently lower than its June 2008 Moderate Growth
Case. The average annual growth rate in oil sands
production is 6 percent over the forecast period. Current
oil sands production of 1.2 million b/d is forecasted to
increase to 2.2 million b/d in 2015 then to 3.3 million b/d
by 2025.
Canadian conventional production is expected to decline
gradually however; light crude oil production from the
Bakken eld in Saskatchewan is expected to grow in the
next few years. Further out on the horizon, the Hebron
heavy oil project in Atlantic Canada is expected to come
on stream by 2017 thereby increasing crude oil supply in
the region.
0
1000
2000
3000
4000
5000
Actual Forecast
Conventional Light
Bitumen Blend*
Upgraded Light
Conventional Heavy
* Bitumen Blend includes some volumes of upgraded heavy sour crude oil and bitumen blended with diluent or ugpraded crude oil.
June '08 Moderate
Growth Forecast
0
1,000
2,000
3,000
4,000
5,000
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Figure 2.6 Operating & In Construction - Western Canada Oil Sands & Conventional Supply
3
In addition to examining the prospects for crude oil production, it is useful to have
an understanding of the potential market demand for the expected growth in oil
sands supply. This assessment will, in turn, assist the industry in the evaluation
of the various pipeline projects that are being proposed. In this context, CAPP
surveyed reneries in Canada and the U.S. to obtain information on their current
capability and plans to process additional volumes of western Canadian crude oil
and, in particular, oil sands to 2015.
CRUDE OIL MARKETS
PADD II
PADD I
PADD V
PADD III
68 [74]
89 [380+]
3,746
1,155 [2,005]
482 [547]
623
2,708
Non-US
8
149 [171]
230 [253]
Supply
2008 - 2,436
2015 - 3,308
1,796
8,378
398
PADD IV
255 [257]
612
2009 Total Refining Capacity
2008 Actual
Demand
Additional Demand
- 2015 Potential
In 2008, total crude oil supply from western Canada
was over 2.4 million b/d. Domestic demand for western
Canadian crude oil was approximately 712,000 b/d and
the remaining supply of over 1.7 million b/d or 70 percent
was exported (Figure 3.1). The primary markets for western
Canadian crude oil are currently: British Columbia; Alberta;
Saskatchewan; Ontario; Minnesota; eastern PADD II
(particularly, Illinois, Indiana, Michigan, and Ohio); PADD IV;
California and Washington in PADD V. Since the reversal
of the Enbridge Spearhead pipeline and the ExxonMobil
Pegasus pipeline in early 2006, western Canadian crude
oil has owed to the Cushing, Oklahoma hub and the U.S.
Gulf Coast, respectively.
Figure 3.1 Market Demand for Western Canadian Crude Oil Actual 2008 vs 2015 Potential
3.1 Canada
Canadian reneries that have access to western Canadian
crude oil have a total rening capacity of over one million b/d.
In 2008, these reneries processed about 712,000 b/d
of western Canadian crude oil. This is expected to
increase to approximately 788,000 b/d by 2015 with
planned renery expansions.
3.1.1 Western Canada
There are eight reneries located in western Canada
with a total rening capacity of about 622,500 b/d.
These reneries process western Canadian crude oil
exclusively. The Moose Jaw asphalt plant in Moose Jaw,
Saskatchewan produces mostly asphalt while other
reneries manufacture a wide range of petroleum products.
In 2008, they received 481,800 b/d of crude oil and this is
expected to increase to 547,200 b/d in 2015 (Figure 3.2).
Figure 3.2 Western Canada: Forecast Western
Canadian Crude Oil Receipts
Receipts of conventional light sweet crude oil are
expected to fall, in part due to the maturity of the basin
as well as renery conversions. Receipts of light synthetic
and heavy crude oil are expected to increase throughout
the forecast period.
Of note, the Petro-Canada conversion project at its
Edmonton renery has been completed; the renery
began to process 100 percent oil sands feedstock in
January 2009. Also, there are plans for the Consumers
Co-operative renery located in Regina to expand by
30,000 b/d and to use some light synthetic crude oil as
feedstock by 2012.
3.1.2 Ontario
There are four reneries (excluding the Nova Chemical
renery and petrochemical complex in Sarnia) located in
Ontario with a total rening capacity of 398,000 b/d.
These reneries process western Canadian crude oil as
well as crude oil (foreign imports and Atlantic Canada
production) that is received by tankers via the Portland-
to-Montral pipeline and, subsequently, the Enbridge
Montral-to-Sarnia pipeline (Line 9). Ontario reneries
have, for a number of years, selected their feedstock
sources based on both availability and pricing.
According to Statistics Canada, Ontario reneries received
367,400 b/d of crude oil in 2008 from the following
sources: Western Canada (230,300 b/d or 63 percent);
Eastern Canada (18,700 b/d or 5 percent); the United
Kingdom (33,200 b/d or 9 percent); Saudi Arabia
(31,200 b/d or 8 percent); United States (23,900 b/d
or 6 percent); and other foreign sources (30,100 b/d or
8 percent). Receipts of western Canadian crude oil are
projected to remain at for the forecast period (Figure 3.3.)
Figure 3.3 Ontario: Forecast Western Canadian Crude
Oil Receipts
3.1.3 Qubec
Qubec has three reneries. The two reneries located in
Montral have a combined rening capacity of 260,000 b/d,
and the renery in Qubec City has a capacity of 215,000 b/d.
The Montral reneries process both crude from Eastern
Canada and foreign sources received from the Portland-
to-Montral pipeline. If the Enbridge Montral-to-Sarnia
pipeline (Line 9) is reversed in the future, the Montral
market could be a new outlet for western Canadian crude
oil supply. As noted in the 2008 report, Petro-Canada
thousand barrels per day Total refining capacity = 622
Light Synthetic
Conventional Light Sweet
Conventional Medium Sour
Heavy
2008 2009 2010 2011 2012 2013 2014 2015
0
100
200
300
400
500
600
Total refining capacity = 398
Light Synthetic
Heavy
2008 2009 2010 2011 2012 2013 2014 2015
0
50
100
150
200
250
300
350
400
had previously announced that it was considering adding
a 25,000 b/d coker at its renery in Montral, which
would displace some light crude oil with heavy crude oil.
However, a decision on this project had been deferred.
The Suncor and Petro-Canada merger was announced in
March 2009. At this time, it is uncertain if the merger will
have any impact on the timing of this project.
3.2 United States
The United States, with a total rening capacity of almost
18 million b/d, is Canadas largest market for crude oil
exports. In 2008, Canada was the largest exporter of
crude oil to the U.S., ahead of both Mexico and Saudi
Arabia. Canada exported over 1.9 million b/d, which was
equivalent to almost 19 percent of total U.S. imports
from foreign sources. Of this volume, 1.7 million b/d was
sourced from Western Canada (Figure 3.1). The U.S.
demand for western Canadian oil supply is expected
to reach 2.9 million b/d in 2015. The bulk of this growth
is expected to be heavy crude oil. The U.S. is a natural
market for much of Canadas rising crude oil supply, in
CAPPs view, because of its geographic proximity to the
U.S. and the geopolitical stability in the country.
The U.S. Department of Energy divides the 50 states in
the U.S. into ve Petroleum Administration for Defense
Districts or PADDs (Figure 3.4). The PADDs were originally
delineated during World War II for oil allocation purposes
and are helpful in this report to facilitate the following
discussion on the various markets in the U.S.
Figure 3.4 Petroleum Administration for Defense
Districts
3.2.1 PADD I (East Coast)
PADD I is located along the east coast of the United States.
There are 14 reneries in Delaware, Georgia, New Jersey,
Pennsylvania, Virginia and West Virginia with a total
capacity of over 1.8 million b/d.
In 2008, renery imports of foreign crude oil totaled
1.4 million b/d and over half of these volumes were light
sweet crude oil (Figure 3.5). Over 259,000 b/d (or 2 percent)
of the crude oil processed in PADD I reneries was sourced
from Canada. Of these volumes, 68,200 b/d came from
western Canada. These receipts, with the bulk being heavy
crude oil, were delivered by pipeline. Without additional
pipeline access to this market, western Canadian crude
oil deliveries are expected to remain relatively at through
2015. PADD I reneries have the potential to process
western Canadian crude oil by displacing imports of other
foreign sourced crude oil, in particular, light sweet crude
oil. There are pipeline proposals being assessed to serve
this market with western Canadian crude oil.
Figure 3.5 2008 PADD I: Foreign Sourced Supply by
Type and Domestic Crude Oil
thousand barrels per day Total refining capacity = 1,796
307
304
803
7
Light/
Medium
Sour
* Includes small volumes of Medium Sweet
Source: EIA
Heavy
Light Sweet*
Domestic Crude
PADD II:
Midwest
PADD I:
East Coast
PADD IV:
Rockies
PADD V:
West Coast,
AK, HI
PADD III:
Gulf Coast
AL
AK
AZ
AR
CA
CO
CT
DE
GA
ID
IL IN
IA
KS
KY
LA
ME
MD
MA
MI
MN
MS
MO
MT
NE
NV
NH
NJ
NM
NY
ND
OH
OK
OR
PA
SD
TN
TX
UT
VT
VA
WA
WV
WI
HI
SC
NC
FL
RI
WY
3.2.2 PADD II (Midwest)
PADD II is located in the U.S. Midwest and has historically
been the largest market for western Canadian crude oil
with a rening capacity of 3.7 million b/d. In 2008, PADD II
reneries received over 1.5 million b/d of foreign sourced
crude oil and over half these volumes were heavy crude oil
(Figure 3.6). Crude oil from western Canada totaled over
1.1 million b/d, making Canada by far the largest supplier.
Figure 3.6 2008 PADD II: Foreign Sourced Supply by
In recent years, however, growth in heavy oil production
in western Canada has saturated this traditional market.
As a result, producers are looking for reners in traditional
markets to increase their capacity for rening heavy crude,
as well as increased access to new markets such as the
U.S. Gulf Coast.
The U.S. Energy Information Administration further divides
PADD II into three rening districts, which is used in the
following discussion.
Northern PADD II
Northern PADD II consists of North Dakota, South
Dakota, Minnesota and Wisconsin. There is one renery
in both North Dakota and Wisconsin and two reneries
in Minnesota. These four reneries have a total rening
capacity of 489,000 b/d. In 2008, imports into northern
PADD II were 287,000 b/d and western Canadian crude oil
accounted for almost all of it. Imports of western Canadian
crude oil are expected to grow to 370,000 b/d by 2011 and
remain at afterwards (Figure 3.7).
In 2007, Flint Hills Resources completed a project to
increase the capacity of its renery in Minnesota by 50,000
b/d. This increased capacity can be more fully utilized
with the completion of the pipeline expansion in the third
quarter of 2008 (see the MinnCan Project in the Pipeline
section of this report). Murphy Oil had previously discussed
plans to expand its 35,000 b/d renery to 235,000 b/d. This
expansion would essentially be a tear-down and rebuild
of the facility. However, it has been announced that these
plans will not proceed until a nancial partner is found.
Figure 3.7 PADD II (North): Forecast Western Canadian
Crude Oil Receipts
342
1,718
844
318
Light/
Medium
Sour
Heavy
Light
Sweet*
Domestic
Crude
Source: EIA
Light Synthetic
Heavy
2008 2009 2010 2011 2012 2013 2014 2015
0
50
100
150
200
250
300
350
400
450
500
Figure 3.8 PADD II (East): Forecast Western Canadian
Crude Oil Receipts
Southern PADD II
Southern PADD II has eight reneries located in Kansas
and Oklahoma with a total rening capacity of 823,500 b/d.
With the reversal of the Enbridge Spearhead pipeline in
March 2006, western Canadian producers were able to
deliver up to 125,000 b/d of crude oil into Cushing,
Oklahoma. In April 2009, Enbridge completed the
expansion of this pipeline to 190,000 b/d. Access to the
Cushing market offers western Canadian crude oil
producers some opportunities to penetrate other markets
(e.g. PADD III) through existing pipelines. Based on the
survey responses, this market is not expected to be a large
growth area for western Canadian crude oil. In 2008,
reneries in this market received about 64,900 b/d of
western Canadian crude oil, and this is projected to rise
to 96,600 b/d in 2015 (Figure 3.9).
Eastern PADD II
Eastern PADD II consists of Michigan, Illinois, Indiana,
Kentucky, Tennessee and Ohio and has 14 reneries
with a total rening capacity of 2.4 million b/d. In 2008,
western Canadian crude oil accounted for 802,800 b/d
or 74 percent of the total foreign imports into the region.
Proposed expansions and conversions could result in
higher runs of western Canadian heavy crude oil in the
next several years (Figure 3.8). Table 3.1 summarizes
announced projects designed to process additional
volumes of Canadian crude oil.
Total refining capacity = 2,414
Light Synthetic
Heavy
2008 2009 2010 2011 2012 2013 2014 2015
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Table 3.1 Summary of Announced Renery Upgrades in Eastern PADD II
Operator Location
Current Capacity
(thousand b/d)
Scheduled
In-Service Description
ExxonMobil Joliet, IL 239 TBD Increased ability to process heavy crude oil
WRB Rening Roxana, IL 306 2011
(originally
end 2009)
Add a 65,000 b/d coker; increase total crude oil
rening capacity by 50,000 b/d; double heavy
oil rening capacity to 240,000 b/d
BP Whiting, IN 160 2012
(originally 2011)
Construction of new coker and a new crude
distillation unit
Marathon Detroit, MI 100 Mid 2012
(originally Q4 2010)
Increase heavy oil processing capacity by
80,000 b/d and increase total crude oil rening
capacity to 115,000 b/d
BP Toledo, OH 155 (60 heavy) Dependant on market
conditions (originally
2015)
Recongured to process 120,000 b/d of
bitumen (180,000 b/d total capacity)
Husky Lima, OH 165 TBD Conversion to process 105,000 of heavy crude
oil (170,000 b/d total)
Valero Memphis, TN 195 2012 (originally 2009) Cat-cracking unit upgrade
Figure 3.9 PADD II (South): Forecast Western
Canadian Crude Oil Receipts
3.2.3 PADD III (Gulf Coast)
PADD III is comprised of Alabama, Arkansas, Louisiana,
Mississippi, New Mexico and Texas. There are 51 reneries
in this market with a total rening capacity of over
8.4 million b/d, of which a signicant portion has heavy
crude oil processing capabilities. It is the largest and
most complex rening district in the United States and is
considered to be potentially well suited and capable of
processing Canadian heavy crude oil.
In 2008, PADD III imported 5.3 million b/d of crude oil from
foreign sources, of which 2.2 million b/d was heavy crude
oil (Figure 3.10). These imports came from 43 different
countries with the top suppliers being Mexico (22 percent),
Saudi Arabia (17 percent), Venezuela (17 percent) and
Nigeria (11 percent). Deliveries of western Canadian heavy
crude oil to this market totaled about 88,800 b/d. The only
pipeline access for delivery of western Canadian crude
oil to the Gulf Coast is through the ExxonMobil Pegasus
pipeline. This pipeline originates at Patoka, Illinois and
ends at Corsicana, Texas and has a capacity of 66,000 b/d.
This pipeline is currently being expanded by 30,000 b/d,
and is expected to be in-service in June 2009. In 2008,
approximately 22,800 b/d that were shipped off the
Westridge dock in Burnaby, British Columbia arrived via
tanker. In addition, about 11,700 b/d of light sweet crude
was also imported from Atlantic Canada by tanker.
Figure 3.10 2008 PADD III: Foreign Sourced Supply
by Type and Domestic Crude Oil
The steep decline in production from Mexicos Cantarell
eld could make securing supply from Canada more
attractive in the future. In addition, Canadas other major
competitor, Venezuela, has recently signed agreements to
ship oil to other markets such as China. In recent years,
PADD III reneries have added several new cokers which
will enable them to run heavier and more sour grades of
crude oil, which are becoming increasingly predominant in
the worlds oil production slate. Table 3.2 summarizes the
major renery upgrades announced for the region.
Although these upgrades may not all be specically
designed to process Canadian crude oil, many of these
companies have conrmed that their reneries are
planning to take more Canadian crude. Thus the main
constraint to the growth of supply of western Canadian
heavy crude used in this region is not available rening
capacity but is in fact the availability of pipeline capacity
to the region. There are a number of pipeline proposals
to increase pipeline capacity to the U.S. Gulf Coast
scheduled for as early as 2012 or 2013. CAPP has
estimated that this market could receive at least 380,000 b/d
of western Canadian crude oil by 2013 based on
announced contractual commitments.
Light Synthetic
Heavy
2008 2009 2010 2011 2012 2013 2014 2015
0
20
40
60
80
100
120
140
160
180
200
2,237
1,834
1,204
1,623
Source: EIA
Light/Medium
Sour
Heavy
Light
Sweet*
Domestic
Crude
3.2.4 PADD IV (Rockies)
PADD IV includes the states of Colorado, Montana, Utah,
Wyoming and Idaho. It has 14 reneries located in four of
the ve states (there are no reneries in Idaho), and has a
total rening capacity of 611,500 b/d. Although PADD IV is
smaller than the other core markets, it has been a stable
market for western Canadian crude oil supply.
In 2008, PADD IV processed 255,000 b/d of Canadian
crude oil or about 48 percent of its feedstock requirements.
Canada is the only source of foreign crude oil to this market.
Throughout the forecast period, western Canadian crude oil
receipts are forecasted to remain relatively at (Figure 3.11).
Some reners have indicated, however, that once crude oil
production from certain areas of PADD IV declines, there
could be opportunities for Canadian crude oil to replace
these supplies. In addition, a few reners have either
recently invested in upgrading projects that could enable
their renery to process oil from the oil sands or have plans
to do so in the future. As a result, the feedstock slate for this
market could become slightly heavier.
Figure 3.11 PADD IV: Forecast Western Canadian
Crude Oil Receipts
3.2.5 PADD V (West Coast)
PADD V includes the states of Alaska, Washington, Oregon,
California, Nevada, Arizona and Hawaii. The majority of
PADD V is geographically divided from the rest of the United
States by the Rocky Mountains, and has very good access
to tankers, and is located in close proximity to production
from Alaska and California. Nonetheless, this market still
depends on foreign imports for almost half of its
requirements (Figure 3.12).
Light Sweet*
Light/Medium Sour
Heavy
2008 2009 2010 2011 2012 2013 2014 2015
0
100
200
300
400
500
600
*Includes small volumes of Medium Sweet
Table 3.2 Summary of Major Announced Renery Upgrades in PADD III
Operator Location
Current Capacity
(thousand b/d)
Scheduled
In-Service Description
Marathon Oil Garyville, LA 256 4Q 2009 Increase capacity to 425,000 b/d
Valero St. Charles, LA 250 2012 (originally
2011)
New 50,000 b/d hydrocracker and 10,000 b/d
expansions to the crude and coker units
Holly Artesia, NM 85 2009 Additional 25,000 b/d capacity and capability
to run up to 40,000 b/d of heavy crude oil
Motiva
Enterprises
Port Arthur, TX 285 2012 (originally
late 2010)
Increase capacity to over 600,000 b/d
Valero Port Arthur, TX 310 2011 (originally
2010)
New 50,000 b/d hydrocracker. Plans for
previously announced 45,000 b/d coker addition
is on hold
WRB Rening Borger, TX 146 2009+ Debottleneck to add 20,000 b/d bitumen capacity
Figure 3.12 2008 PADD V: Foreign Sourced Supply by
For the purposes of the remainder of this report, the PADD V
market region will focus only on Washington and California
as these states represent both the current demand and
future prospects for western Canadian crude oil.
Washington
There are ve reneries in Washington that have a
combined capacity of 629,000 b/d. Alaska is still the
primary source of feedstock for these reneries, however;
Alaskan production continues to decline. As a result, these
reners are becoming increasingly dependent on imports
from Canada and other countries. In 2008, these reneries
received 221,000 b/d of foreign crude oil, sourced primarily
from Canada (56 percent), Angola (18 percent) and Saudi
Arabia (15 percent).
In 2008, receipts of western Canadian crude were
123,000 b/d. These receipts are expected to remain
at throughout the forecast period (Figure 3.13).
ConocoPhillips has delayed its proposed addition of a
25,000 b/d coker unit at its renery located at Ferndale.
Construction is now scheduled to start in 2012.
The Washington market has the potential to process
additional volumes of western Canadian crude oil but given
the latest supply forecast and the small size of this niche
market, development of this market may be limited.
Figure 3.13 Washington: Forecast Western Canadian
Crude Oil Receipts
California
California has 19 reneries with a total rening capacity of
over 2 million b/d. Most of the reneries are located near
the coast in the Los Angeles area and in the San Francisco
Bay area. These reneries account for almost 95 percent
of the rening capacity in the state. These reneries are
among the most sophisticated in the world, partly due to
California having the strictest environmental requirements
in the United States for rened petroleum products. They
have the capability to process a wide variety of crude oil
types and are designed to yield a higher proportion of
light products, such as gasoline. The three reneries in
Bakerseld are smaller and process local California crude
oil; they would not be expected to receive Canadian crude.
In 2008, California reneries received about 38 percent
of their supply from California; 13 percent were domestic
imports sourced from Alaska with the rest of their supply
from foreign sources, delivered by tanker through marine
terminals. The top three sources of the 853,000 b/d
in foreign crude were Saudi Arabia (27 percent); Iraq
(24 percent); and Ecuador (20 percent). Canada only
accounted for about 3 percent of foreign imports
(Figure 3.14).
416
590
187
698
678
Light/
Medium
Sour
Heavy
Light
Sweet*
Other
Domestic
Domestic -
Alaska
Source: EIA
Light Sweet*
Light/Medium Sour
Heavy
2008 2009 2010 2011 2012 2013 2014 2015
0
100
200
300
400
500
600
*Includes small volumes of Medium Sweet
Figure 3.14 2008 PADD V (California): Foreign Sourced
Supply by Type and Domestic Crude Oil
The rate of decline of California production has eased
over recent years compared to historical trends but the
California Energy Commission still expects production
to fall by 2 to 3 percent per year in the future. Alaskan
crude production is supplied primarily to Alaska and
Washington, with the balance going to California. As
production in Alaska continues to decline, the California
reneries will need to replace their domestic crude oil
sources with increased imports.
Given Canadas proximity to California, this would appear
to be a potential market opportunity for western crude
oil. The California Air Resources Board has recently
introduced a new low-carbon fuel standard to be
implemented by 2012. However, greenhouse gas (GHG)
reductions in the oil sands along with Canadian GHG
policies may qualify oil sands to continue to supply this
market. With less optimistic views currently with respect
to oil supply growth, pipeline proposals to serve this
market have been deferred and are being re-evaluated.
3.3 Asia
The Asian market has attracted signicant interest over the
last few years because of its rising demand for energy.
Undoubtedly, Asia has also been affected by the global
economic downturn, but this market, particularly China and
India, remains a prospect in the longer term. China is the
largest consumer of oil after the United States and
economic growth rates are expected to be relatively strong
compared to other countries. Table 3.3 shows oil demand
from 2006 to 2009 in the major Asian countries.
The International Energy Agency (IEA) forecasts that oil
demand from China will decline slightly in 2009 but growth
in the longer term is anticipated. There are a number of
pipeline project proposals that could take western
Canadian crude oil to these markets.
Table 3.3 Total Oil Product Demand in Major Asian
Countries
million b/d 2006 2007 2008 2009
China 7.21 7.54 7.86 7.80
India 2.80 2.95 3.08 3.13
Japan 5.20 5.01 4.74 4.05
Korea 2.18 2.21 2.15 2.13
Source: International Energy Agency (IEA), April 2009
3.4 Methodology
CAPP did not put any constraints on the data submitted
by reners nor were any alternate cases prepared. Some
assumptions were made based on discussions with
reners and publicly available information.
The CAPP survey categorizes western Canadian crude oil
into four main types as follows:
1. Conventional Light Sweet (greater than 27 API and less
than or equal to 0.5% sulphur) including condensates
and pentanes plus;
2. Heavy (equal to or less than 27 API) including
conventional heavy, synthetic sour and crude oil blends
such as DilBit, SynBit and DilSynBit;
3. Conventional Medium Sour (greater than 27 API and
greater than 0.5% sulphur); and
4. Light Sweet Synthetic
351
468
34
683
240
Light/
Medium
Sour
Heavy
Light
Sweet*
Other
Domestic
Domestic -
Alaska
Source: EIA
For the purposes of the historical data in this section of
the report, the following crude types and denitions apply:
Sweet: crude oil with a sulphur content of less than
or equal to 0.5%
Sour: crude oil with a sulphur content of greater
than 0.5%
Light: crude oil with an APl of at least 30
Medium: crude oil with an APl greater than 27 but
less than 30
Heavy: crude oil with an APl of 27 APl or less
No differentiation is made between sweet and sour crude
oil that falls in the heavy category because heavy crude oil
is generally sour.
3.5 Markets Summary
Based on the survey results, the forecasted potential
demand for Canadian crude oil in all markets is lower than
in the last report. However, in 2015, PADD II is expected
to be able to take more western Canadian crude oil due
to the planned renery conversions in the area. PADD III
is considered a market with signicant potential given its
large rening capacity and the ability of many of these
reners to process heavy crude. Also, the steep decline in
Mexicos production and Venezuelas recent shift towards
exporting oil to non-U.S. markets such as China, are
factors that could make securing supply from Canada more
attractive in the future. The full potential of this market
remains uncertain at this stage, however, given limited
pipeline access to this region from western Canada.
Pipelines are the main connection between the crude oil supply areas to the
end markets since they are generally the most efcient and reliable mode of
transporting crude oil. As such, pipeline developments determine the destination
of Canadian crude oil. The additional capacity from all currently active
(i.e. in construction or in the regulatory process) pipeline projects would result
in total available pipeline capacity in excess of forecast supply through to the end
of the forecast period. In addition, there remain a number of proposals that have
been grouped into three main areas: U.S. Midwest, Ontario, Qubec, U.S. East
Coast; the U.S. Gulf Coast; and the West Coast. However, the proposed timing
for many of these proposals is uncertain.
4
CRUDE OIL PIPELINES
4.1 Major Crude Oil Pipelines
Historically, major Canadian crude oil pipelines such as the
Enbridge Pipeline and the Kinder Morgan Trans Mountain
pipeline operated as common carriers. The exceptions
are the Kinder Morgan Express pipeline and the Enbridge
Line 9 (Montreal, Qubec to Sarnia, Ontario) that operate
as contract carriers (i.e. require long-term take-or-pay
commitments). On common carrier pipelines, shippers
nominate monthly for space on the pipeline without a
contract. The TransCanada Keystone pipeline, which is
scheduled to be in-service by the end of 2009, will operate
as a contract carrier while the Enbridge Alberta Clipper
pipeline will be a common carrier.
4.1.1 Existing Major Crude
Oil Pipelines
Western Canadian crude oil is delivered to markets or other
pipelines by three major Canadian trunklines Enbridge,
Trans Mountain and Express pipelines.
The following table provides the estimated current crude oil
capacity on these trunklines.
Pipeline Crude Type
Estimated
Annual Capacity
(thousand b/d)
Enbridge
Light 692
Heavy 1,186
Express Light/heavy (35/65) 280
Trans Mountain Light/heavy (80/20) 300
TOTAL 2,458
Enbridge Pipelines
The Enbridge system which operates in Canada and the
U.S. is the world's longest crude oil pipeline. It can deliver
more than 2 million b/d of crude oil and other commodities
from primarily western Canada to other markets in western
Canada, the U.S. upper Midwest and Ontario. In addition,
it connects to various pipelines in the U.S. such as
Spearhead and Mustang. It also receives crude oil from
U.S. pipelines for deliveries to markets in the U.S. Midwest
and Ontario.
In 2007, Enbridge added about 45,000 b/d of capacity
downstream of Superior, Wisconsin while no additional
capacity was added upstream of Superior. In April 2008,
Enbridge completed Stage 1 of the Southern Access
program (Line 61) from Superior to Delavan adding about
46,000 b/d of capacity, while the remainder of Line 61 from
Delevan to Flanagan began operating in May 2009.
Kinder Morgan Trans Mountain Pipeline
The Trans Mountain system originates in Edmonton,
Alberta and transports crude oil to the Vancouver area,
including its Westridge dock for vessel or barge loadings,
and by pipeline to reneries in Washington State.
The system also ships rened petroleum products from
the Edmonton reneries to Kamloops, British Columbia
and Vancouver.
It can currently transport about 300,000 b/d assuming
20 percent of the volumes are heavy crude oil. Note that
the actual available capacity varies depending on the
amount of heavy crude oil transported. Currently, about
25 percent of the volumes shipped are heavy crude oil.
In 2008, Trans Mountain completed TMX1, which consisted
of a Pump Station Expansion (PSE) and the Anchor Loop
Expansion (ALE) project.
Kinder Morgan Express-Platte Pipelines
The Express pipeline ships crude oil from Hardisty, Alberta
to PADD IV and has a capacity of 280,000 b/d. The pipeline
is underpinned by contracts, many of which expire in
2012, totaling 231,000 b/d with the remaining space being
available for spot shippers.
The Platte system connects to Express at Casper,
Wyoming and extends to Guernsey, Wyoming then to
Wood River, Illinois. Capacity from Guernsey to Wood
River is about 145,000 b/d and because of strong demand,
pipeline capacity has been constrained since January
2007. Therefore, Express is not operating at capacity due
to insufcient capacity on the Platte system.
Enbridge Spearhead (South) Pipeline
The Spearhead pipeline is connected to the Enbridge
Lakehead system at the Enbridge terminal near Chicago
and delivers light and heavy crude oil to Cushing,
Oklahoma. As of May 2009, the initiation point has been
changed to Flanagan, Illinois and the pipeline capacity
was increased by 65,000 b/d to 190,000 b/d.
Committed shippers have been allocated 30,000 b/d out
of this expanded capacity. This portion of the pipeline will
continue to operate in southbound service and is referred
to as Spearhead South. There are plans to reverse the
remaining portion of the pipeline that runs from Flanagan
to Hartsdale, Illinois to operate in northbound service. The
pipeline originally operated in northbound service but was
reversed in March 2006.
Enbridge Light Sour Line
As part of its Southern Lights diluent project, Enbridge
constructed a 20-inch diameter light sour crude oil line
from Cromer, Manitoba to Clearbrook, Minnesota. This line
came into service in February 2009 and has a capacity of
185,000 b/d. This expansion was built to provide access
to growing crude oil deliveries into the Enbridge Cromer
terminal from southeast Saskatchewan.
ExxonMobil Mustang Pipeline
The Mustang pipeline is jointly owned by Enbridge
Pipelines and ExxonMobil and is connected to the
Enbridge Lakehead system at Lockport, Illinois and
extends to the Patoka, Illinois terminal. It has a heavy
crude oil capacity of about 91,000 b/d of which 88,000 b/d
is committed capacity. Nominations on the pipeline have
exceeded capacity since December 2005 and this trend is
expected to continue until there is new pipeline capacity
into the region.
ExxonMobil Pegasus Pipeline
The Pegasus pipeline was reversed in March 2006 and
runs from Patoka, Illinois to Nederland, Texas. It currently
provides western Canadian crude oil producers with the
only pipeline access to the U.S. Gulf Coast. It has a heavy
crude oil capacity of 66,000 b/d, of which 50,000 b/d is
committed capacity. Pegasus is scheduled to be expanded
to 96,000 b/d by the end of June 2009. Nominations have
exceeded capacity since it was reversed.
MinnCan Project
The Minnesota Pipeline is connected to the Enbridge
system at Clearbrook, Minnesota and transports crude oil
from Canada to Minnesota reneries owned by Flint Hills
in Rosemount and Marathon Oil in St. Paul.
Figure 4.1 Current Crude Oil Expansions from Western Canada
This line was operating at its capacity of 300,000 b/d. The
MinnCan project was designed to bring additional crude
oil supply from Canada to these reneries. It is a new
24-inch diameter pipeline that follows most of the original
systems route but ends at the Flint Hills renery. This
endpoint provides a direct interconnection with that facility
and a direct interconnection, through existing pipeline
facilities, with Marathons renery. The MinnCan project
was completed in the third quarter of 2008, providing up to
165,000 b/d additional crude to these reneries. This new
pipeline can also be expanded up to 350,000 b/d.
4.2 Crude Oil Transportation
Requirements
Given that the growth in western Canadian crude oil supply
is expected to be lower than in recent forecasts, the main
driver behind the proposals for new pipeline projects has
diminished substantially.
In 2008, the three major trunklines from western Canada
transported over 1.8 million b/d of crude oil. These pipelines
operated close to full available capacity for most of the year.
The pipeline expansion projects that have already been
approved and are in construction will add over one million b/d
in pipeline capacity by the end of 2010 (Table 4.1).
This capacity will meet and exceed the forecast supply
through to 2019 (Figure 4.1).
Table 4.1 Approved Oil Pipeline Expansions from
Western Canada
Pipeline Proposed in
Service Date
Capacity
(thousand b/d)
TransCanada Keystone Dec 2009 435
Enbridge Alberta Clipper Jul 2010 450
Extension 4Q 2010 155
TOTAL Capacity 1,040
Portland
Sarnia
Buffalo
Philadelphia
Toledo
Lima
Chicago
Patoka
Wood
River
Cushing
Flanagan
St. Paul
Guernsey
Salt Lake City
St. James
Houston
Hardisty
Edmonton
Anacortes
Burnaby
Express
Trans
Mountain
Platte
BP
Enbridge
Mid Valley
Capline
Current Oil Pipeline Expansions from Western Canada
4
6
Montreal
Current Oil Pipeline Expansions/Proposals to the U.S.
Midwest, Ontario, Qubec and U.S. East Coast
Portland
Montreal
Sarnia
Buffalo
Philadelphia
Toledo
Lima
Chicago
Patoka
Wood
River
Cushing
Flanagan
St. Paul
Guernsey
Salt Lake City
St. James
Houston
Hardisty
Edmonton
Anacortes
Burnaby
Express
Trans
Mountain
Platte
BP
Enbridge
Mid Valley
Capline
4
Enbridge Ohio Access
Enbridge
Southern Access Expansion
10
16
Sunoco
Buffalo to Philadelphia
Sunoco to Toledo
19 20
Enbridge Trailbreaker
Portland Pipeline Reversal
17
17
Mustang Expansion
Enbridge Spearhead
Expansion (North)
Enbridge (North Dakota) Expansion
9
6
10
15
18
4.3 Crude Oil Pipeline
Expansions/Proposals
The remainder of this section focuses on pipeline
expansions and proposals to ship western Canadian crude
oil to the various markets and is divided into three areas:
U.S. Midwest, Ontario, Qubec, East Coast; the U.S. Gulf
Coast; and the West Coast.
There are currently two major crude oil pipeline expansions
in construction from western Canada to the U.S. Midwest:
the Enbridge Alberta Clipper and the TransCanada Keystone.
In addition, there are many other expansions or proposals
that will connect to these two pipelines to deliver western
Canadian crude oil to markets outside the U.S. Midwest such
as, Ontario, Qubec, PADD I and the U.S. Gulf Coast
(Figure 4.2). These projects are summarized in Appendix C.1.
4.3.1 Crude Oil Pipeline
Expansions/Proposals to the U.S.
Midwest, Ontario, Qubec and
the East Coast
TransCanada Keystone and Extension 4
The Keystone pipeline will run from Hardisty, Alberta to
terminals in Wood River and Patoka, and is scheduled to
be in-service in December 2009 with an initial capacity
of 435,000 b/d. The pipeline will include both new
construction and the conversion of existing pipe that is
currently in natural gas service. All key Canadian and
U.S. regulatory approvals are in place and construction
commenced in the second quarter of 2008.
Figure 4.2 Pipeline Proposals to the U.S. Midwest, Ontario, Qubec and U.S. East Coast
TransCanada is also proposing two extensions to the
Keystone pipeline. The rst one is an extension to Cushing,
Oklahoma, which would connect at the Nebraska/
Kansas border. The extension would increase capacity by
155,000 b/d to an ultimate capacity of 590,000 b/d, and is
scheduled to be in-service in the fourth quarter 2010.
The second one is a Heartland Extension, which is a
600,000 b/d oil pipeline from Fort Saskatchewan to the
Keystone connection at Hardisty. It is scheduled to be in
service in the 2012 or 2013 timeframe.
TransCanada DilBit Pipeline
TransCanada is proposing a 400,000 b/d DilBit line from
the oil sands area of Fort McMurray to Hardisty, Alberta
with multiple receipt points. Potential timing for this project
is sometime between 2012 and 2014.
Enbridge Alberta Clipper 6
The 36-inch diameter Clipper pipeline is an expansion of
the Enbridge existing mainline system and will extend from
Hardisty, Alberta to Superior, Wisconsin with a connection
to the Minnesota pipeline at Clearbrook. The initial capacity
is 450,000 b/d of heavy crude oil and could be further
expanded to 800,000 b/d. It is scheduled to be in-service
in July 2010.
In May 2009, Enbridge extended Line 4 from Hardisty to
Edmonton by connecting currently deactivated 48-inch
diameter segments with a new 36-inch diameter pipeline.
This extension was built to ensure sufcient heavy crude oil
capacity for Enbridge Alberta Clipper and has a capacity of
450,000 b/d. It can be expanded to an ultimate capacity of
800,000 b/d.
Enbridge Southern Access Expansion/
Extension 10
Enbridge completed construction of its Southern Access
expansion program. The rst phase, completed in April
2008, was a new 42-inch diameter pipeline from Superior
to Delavan, Wisconsin. The second phase build out to
Flanagan, Illinois was subsequently completed in May 2009
adding about 400,000 b/d of capacity. Further expansions
to 600,000 b/d and 800,000 b/d can be achieved by
adding pump stations. The Southern Access pipeline will
connect to the Enbridge Spearhead pipeline at Flanagan.
See sections on Enbridge Spearhead South and Enbridge
Spearhead North.
Enbridge is also proposing to extend the Southern
Access pipeline to the Patoka, Illinois hub from Flanagan
with a 36-inch diameter line that would have an initial
capacity of 400,000 b/d. The pipeline could be in-service
as early as 2012 but the actual timing will depend on the
market and regulatory approvals.
Enbridge Spearhead North 15
Since May 2009, the Southern Access pipeline has
connected with Spearhead at Flanagan. Currently,
Spearhead ows southbound but Enbridge intends to
reverse the segment of the pipeline between Flanagan,
Illinois to Hartsdale, Indiana (near Chicago) as part of the
Southern Access project. This segment, referred to as
Spearhead North, has a capacity of 130,000 b/d and is
scheduled to be in-service by Q3 2009.
Bow River Pipeline
The Bow River Pipeline system gathers oil production in
southern Alberta for delivery north to Hardisty, Alberta and
south to interconnecting export pipelines near the Montana
border. Inter Pipeline Fund (Inter Pipeline) plans to expand
oil delivery capabilities on the Bow River Pipeline system
and has received support in terms of 7-year contractual
commitments to transport 30,000 b/d. The project includes
the construction of 135 kilometres of new pipeline and will
enable the shipment of segregated crude oil streams from
Hardisty, Alberta to rening markets in Montana. The intent
of this project is to allow crude oil types sourced at
Hardisty to be shipped south as a distinct, segregated
stream and give Montana reneries access to multiple
grades of oil available at Hardisty without commingling with
the locally gathered Bow River oil stream. The project is
scheduled for completion in the rst quarter of 2010.
Enbridge Line 5 Expansion
Line 5 extends from Superior, Wisconsin to Sarnia, Ontario.
The expansion consists of adding Drag Reducing Agent
(DRA), and is expected to add 50,000 b/d of new light
crude oil capacity. Total capacity will then approximate
540,000 b/d. The timing for this project is undetermined.
Enbridge Line 6B Debottleneck and
Expansion
Enbridge is exploring various options to expand Line
6B which extends from Chicago, Illinois to Sarnia. Tank
constraints are currently limiting usable capacity from
290,000 b/d to 190,000 b/d. The project scope includes
two new tanks and pump stations which could add
between 65,000 and 135,000 b/d of capacity. Total new
capacity would approximate up to 425,000 b/d and the
projected in-service date is in the rst quarter of 2010.
This new capacity would be required should Enbridges
Line 9 be reversed.
Enbridge Trailbreaker 17
Enbridge had been in discussions with industry to reverse
Line 9 from Sarnia to Montreal in order to access markets
in Ontario, Quebc, the Maritimes and U.S. markets.
If reversed, Line 9 could ship up to 215,000 b/d of crude.
The project proposal included the reversal of one line on
the Portland Pipeline system to ship 200,000 b/d that
would be loaded on tankers. Portland Pipeline conducted
an open season for the reversal but did not receive the
level of rm volume commitments required to proceed.
At this time Enbridge is continuing its discussions with
industry with respect to appropriate timing and market
conditions needed to reconsider this proposal.
Enbridge North Dakota 9
The North Dakota pipeline connects to the Enbridge
Lakehead pipeline at Clearbrook, Minnesota and provides
producers in Montana and North Dakota with access to
markets in PADD II and Ontario. Increased production in
these areas has resulted in a need for additional pipeline
capacity. Enbridge added 30,000 b/d of capacity to the
North Dakota system in January 2007 and is planning
another expansion of 52,000 b/d by January 2010, which
would increase total system capacity to 162,000 b/d.
ExxonMobil Mustang Expansion 18
The Mustang expansion proposal would increase
throughput by adding new and modifying existing pump
stations. The pipeline can transport both light and heavy
crude. With the proposed expansion, the capacity could
increase by 38,000 b/d to 131,000 b/d.
Enbridge Line 6C
Enbridge is considering a new 36-inch diameter line from
its Grifth/Hartsdale terminal to Stockbridge, Michigan that
would parallel Line 6B. The intent is to deliver additional
supply to reneries in Michigan and Ohio. The estimated
capacity would be 400,000 b/d with an in-service date
of 2012. If needed, the line could be extended to
Sarnia, Ontario.
Sunoco Pipeline 19 20
Sunoco is proposing a crude oil pipeline to reneries in
the Philadelphia area. The market in this area includes
Sunocos two reneries in Pennsylvania and its New Jersey
renery as well as the ConocoPhillips and Valero reneries
in Pennsylvania, New Jersey and Delaware. The project
includes an expansion on the Enbridge system to Buffalo
and the use of the existing Sunoco right-of-way to build a
new 24-inch diameter pipeline from Buffalo to Philadelphia.
The capacity of the pipeline would be about 400,000 b/d.
Sunoco is also considering expanding its Marysville to
Toledo pipeline from 190,000 b/d to 288,000 b/d.
Enbridge Ohio Access 16
Enbridge is proposing a phased approach to increase
the ability to transport additional deliveries of western
Canadian crude oil. The timing is scheduled to coincide
with the timing of expansions and conversions to process
more heavy crude oil at reneries in Detroit and Ohio. The
rst phase would entail a debottlenecking of Line 17 and a
new pipeline ex-Grifth which would increase capacity by
20,000 b/d to 120,000 b/d to serve increased demand by
Marathons Detroit renery.
Phase 2 would increase pipeline capacity from 120,000 b/d
to 400,000 b/d to serve the reneries in Toledo and Lima,
Ohio. Phase 2 includes a new 36-inch diameter line from
Stockbridge to Samaria and then 20-inch diameter laterals
to Toledo and Lima.
Expansions/Proposals to
the U.S. Gulf Coast
The U.S. Gulf Coast began receiving western Canadian
crude oil by pipeline in April 2006 through the reversed
ExxonMobil Pegasus pipeline, which is scheduled to
be expanded in June 2009. Prior to this, there were
and continue to be spot vessel movements of western
Canadian crude oil from the Trans Mountain Westridge
dock. Due to the large rening capacity of the PADD III
market, Canadian producers have been assessing various
pipeline proposals to the Gulf Coast (Figure 4.3).
There are two proposals for bullet lines from Alberta to
the U.S. Gulf Coast: the TransCanada Keystone XL and
Altex Energy - with total capacity of about 1,565,000 b/d.
Four pipeline companies (ExxonMobil/Enbridge, Sunoco,
ExxonMobil and Centurion) are proposing new pipelines,
expansions or reversal of existing lines to transport western
Canadian crude oil from the U.S. Midwest to the Gulf
Coast. The in-service dates for these proposals will depend
on market conditions. Proposals for projects targeting the
U.S. Gulf Coast are summarized in Appendix C.2.
BP/Enbridge Gulf Access Pipeline 12 13 14
BP and Enbridge are proposing the Gulf Access Pipeline
which, in Phase 1, consists of the reversal and expansion
of BP #1 pipeline which will interconnect with Southern
Access at Flanagan, Indiana to move between 150,000 b/d
and 200,000 b/d of crude oil to Cushing, Oklahoma. From
Cushing, a new 250,000 b/d crude oil pipeline would be
built to the U.S. Gulf Coast with interconnections to the
Houston, Texas area reneries. Extensions could also be
built to reach either Port Arthur, Texas or Nederland, Texas.
Current Oil Pipeline Expansions/Proposals to the U.S. Gulf Coast
Portland
Montreal
Sarnia
Buffalo
Philadelphia
Toledo
Lima
Chicago
Patoka
Cushing
St. Paul
Salt Lake City
St. James
Houston
Edmonton
Anacortes
Burnaby
TransCanada
Keystone XL
Altex
Express
Trans
Mountain
Platte
BP
Enbridge
Mid Valley
Capline
Flanagan
Guernsey
Wood
River
Hardisty
4
5
8
6
10
11
12
13
14
22
21
23
BP/Enbridge GAP
Phase 1
BP/Enbridge GAP
Phase 2
BP/Enbridge GAP
Phase 3
Enbridge Southern Access Expansion
TransCanada
Louisiana Access
Centurion Pipeline
ExxonMobil/Enbridge
Pegasus Expansion
Sunoco to USGC
Figure 4.3 Pipeline Proposals to the U.S. Gulf Coast
Phase 2 of this project requires the building of the Enbridge
Southern Access Extension and the reversal of the
Enbridge Ozark pipeline. The Southern Access extension
pipeline would extend from Flanagan to Patoka, Illinois.
From Patoka, the crude oil could be transported to Wood
River, Illinois then ow on the reversed Ozark pipeline,
which has a capacity of about 200,000 b/d, to Cushing.
The system capacity to the U.S. Gulf Coast would be
approximately 400,000 b/d with an in-service date as early
as 2012.
With market support, Phase 3 of this project would
include another new pipeline that will extend from Patoka
to either Port Arthur or Nederland.
Sunoco Pipeline to U.S. Gulf Coast 21
Sunoco has a proposal to construct a new pipeline line
from Cushing, Oklahoma to its Wortham, Texas terminal
and then reverse a 26-inch diameter pipeline to Nederland,
Texas. The Cushing portion would have an initial capacity
of 300,000 b/d.
ExxonMobil Pipeline Enbridge Pipelines
Joint Initiative
ExxonMobil and Enbridge are proposing the Texas
Access pipeline which consists of a new 30-inch
diameter crude oil pipeline from Patoka to Beaumont,
Texas with a capacity of 445,000 b/d, and a connecting
lateral to Houston. With horsepower additions, the
pipeline could expand to more than 550,000 b/d.
TransCanada Keystone XL and Louisiana
Access options 8 23
The TransCanada Keystone XL project is a proposal for a
36-inch diameter pipeline from Hardisty, Alberta where
it would connect with the proposed Cushing Extension at
the Nebraska/Kansas border, and then to Port Arthur and
Houston, Texas. The intent is to have a bullet pipeline from
Hardisty to the U.S. Gulf Coast by the end of 2012.
The initial pipeline capacity would be 700,000 b/d;
380,000 b/d of this capacity has been secured by
contracts. The pipeline could be further expanded to
1.5 million b/d.
Additional options being proposed include access to
Louisiana by either building new or using existing facilities
from Patoka to New Orleans or building a new line from
Port Arthur, Texas to New Orleans. Proposed project timing
is between 2014 and 2016.
Altex Energy 5
In light of the lower crude oil supply forecast, industry
has been re-evaluating the timing and need for the Altex
proposal. Altex is proposing a 36-inch diameter pipeline
employing proprietary technologies that would use less
diluent per barrel of bitumen than is required by other
pipelines. The pipeline would transport heavy crude oil
or bitumen from various locations in Alberta to the Port
Arthur/Beaumont, Texas area. The initial capacity is
estimated at 425,000 b/d and could expand to
one million b/d with additional pumps.
ExxonMobil Pegasus Expansion 22
The Pegasus expansion would increase capacity by 30,000 b/d
from Patoka, Illinois to Nederland, Texas with a start up
date of June 2009.
Centurion Pipeline 11
Centurion Pipeline, owned by Occidental Petroleum,
will reverse an existing 16-inch diameter common carrier
pipeline to deliver western Canadian heavy crude oil
from Cushing to Slaughter, Texas. In July 2008, Holly
Corporation (Holly) agreed to build additional infrastructure
from Slaughter to its Navajo renery in New Mexico. These
projects are expected to be complete and in service by
the fourth quarter of 2009. Previously, Holly had entered
into shipping commitments on both the Keystone and
Spearhead pipelines for Canadian crude oil delivered
to Cushing, Oklahoma.
Expansions/Proposals to
the West Coast
The map in Figure 4.4 illustrates crude oil pipeline
expansions from western Canada to the West Coast.
Appendix C.3 provides a summary of all proposals.
Kinder Morgan TMX2, TMX3 and
Northern Leg Expansion 2 3
The TMX2 expansion could increase capacity by 80,000 b/d
by 2012. The scope of TMX2 includes a new line from
Edmonton, Alberta to Kamloops, British Columbia.
TMX3 includes a new line to the Washington State
reneries and a second berth at the Westridge dock.
TMX3 could provide an additional 320,000 b/d of new
capacity by 2013. These expansions would provide
additional access to Vancouver, Washington State and
other markets served by oil tankers and barges which load
at its Westridge dock.
TMX Northern Leg is a pipeline with a capacity of
400,000 b/d, extending from its existing system near
Rearguard, British Columbia to a deep water port facility
at Kitimat, British Columbia that would accommodate
Very Large Crude Carriers (VLCC) for delivery to PADD V
or the Far East. Depending on industry support, the
pipeline could be in service as early as 2014.
Portland
Sarnia
Buffalo
Philadelphia
Toledo
Lima
Chicago
Patoka
Wood
River
Cushing
Flanagan
St. Paul
Guernsey
Salt Lake City
St. James
Houston
Hardisty
Edmonton
Anacortes
Burnaby
Express
Trans
Mountain
Platte
BP
Enbridge
Mid Valley
Capline
Crude Oil Pipeline Expansion/Proposals to the West Coast
Enbridge Gateway Kitimat
Kinder Morgan
TMX2 Expansion
TMX3 Expansion
3
1
2
TransCanada
AB-California
7 Montreal
Figure 4.4 Pipeline Proposals to the U.S. West Coast
Kinder Morgan Vancouver Port
Development
Kinder Morgan is proposing further development at
the Vancouver port area by building a pipeline from the
Westridge Dock to the Vancouver Wharves and/or building
a line to the Delta Port enabling access to larger tanks
thereby increasing export capacity.
Enbridge Northern Gateway 1
The Northern Gateway project includes the construction of
a new 36-inch diameter pipeline from Edmonton, Alberta
to a deep water port at Kitimat, British Columbia and is
being designed to provide 500,000 b/d of crude oil export
capacity. Crude oil would be loaded on tankers for delivery
to PADD V and the Far East. Enbridge is, depending on
industry support, anticipating submitting an application to
the National Energy Board in the second quarter of 2009.
TransCanada AB California 7
TransCanada is in discussion with parties to transport
400,000 b/d of western Canadian crude oil by pipeline
to California to access over 1.8 million b/d of rening
capacity. The estimated in-service date is 2016.
4.3.4 Other Proposals
Canadian National (CN) Railways and Altex are jointly
explorting a Pipeline on Rail strategy. This proposal could
transport as little as 10,000 to 20,000 b/d of undiluted
or under-diluted bitumen in heated railcars. Through
connections to other railroads, CN can access the majority
of U.S. Gulf Coast reneries. This rail solution would also
be suitable for condensate imports. CN has expressed that
if there was interest, there would be no upper limit to the
volumes that could be transported via rail.
Diluent Pipeline Proposals
Portland
Sarnia
Philadelphia
Toledo
Lima
Chicago
Cushing
St. Paul
Salt Lake City
St. James
Houston
Anacortes
Burnaby
Express
Trans
Mountain
Platte
Enbridge
Mid Valley
Guernsey
Hardisty
Capline
Capline/Chicap
Enbridge Southern Lights
Enbridge
Gateway Condensate Import
TransCanada
Edmonton
Patoka
Wood
River
24
25
26
27
Montreal
Figure 4.5 Diluent Pipeline Proposals
4.3.5 Diluent Pipeline Proposals
Figure 4.5 shows the current diluent pipeline proposals.
Enbridge Southern Lights 26
The project is in response to demand by western Canadian
heavy crude oil producers for additional diluent supply from
various sources in the U.S. Midwest. The project includes
a new 16-inch diameter diluent line from Flanagan, Illinois
(near Chicago) to Clearbrook, Minnesota, and the reversal
of Line 13 from Clearbrook to Edmonton, Alberta.
The capacity of the diluent import line is 180,000 b/d,
of which 77,000 b/d is for committed shippers, and
can be expanded to 300,000 b/d. The in-service date
of July 2010 will coincide with crude oil expansions on
the Enbridge mainline system (i.e. Southern Access and
Alberta Clipper/Line 4 extension) in order that eastbound
capacity is unaffected.
Joint Capline/Chicap Industry Initiative 27
The owners of both Chicap and Capline are co-operating
to enable the movement of a limited amount of diluent
from the U.S. Gulf Coast to Chicago by mid 2010. The
plan is for the Chicap pipeline to connect to the Enbridge
Southern Lights pipeline. Chicap runs from Patoka, Illinois
to Manhattan and Mokena, Illinois. Ultimate capacity on
the pipeline is estimated to be 320,000 b/d operating in
batched diluent and light crude oil service. Initial total
capacity of the pipeline in 2010 will be about 50 percent
of the ultimate capacity. Capline extends from St. James,
Louisiana to Patoka and has a capacity of more than
one million b/d. The level of diluent deliveries is not known
at this time.
Enbridge Northern Gateway Diluent 24
As part of its Northern Gateway crude oil pipeline project,
Enbridge is proposing a 20-inch diameter, 175,000 b/d
diluent import pipeline that would extend from Kitimat,
British Columbia to Edmonton, Alberta. It would supply
diluent to western Canadian heavy crude oil producers.
An application to the National Energy Board is expected
in the second quarter of 2009.
TransCanada Diluent Pipeline 25
TransCanada is proposing a diluent line from Fort
Saskatchewan, Alberta to Fort McMurray, Alberta with an
initial capacity of 120,000 b/d and multiple delivery points.
The possible in-service date is between 2012 and 2014.
4.4 Pipeline Summary
The major pipeline proposals that are currently under
construction will add over one million b/d in pipeline
capacity exiting western Canada by the end of 2010.
A corresponding growth in supply of one million b/d is not
forecasted until 2016. Pipeline projects that are currently
underway or in the regulatory process will provide excess
capacity for a number of years and sufcient pipeline
capacity available exiting Western Canada throughout the
forecast period.
There are still many pipeline proposals being presented.
However, many proposals were developed in response to
earlier expectations that additional capacity was required
to meet more rapid growth in oil sands production than is
currently being forecast. Given the current supply outlook
and market conditions, the timing of many of these pipeline
proposals has been delayed.

GLOSSARY
API Gravity A specic gravity scale developed by the American Petroleum Institute (API) for measuring the
relative density or viscosity of various petroleum liquids.
Barrel A standard oil barrel is approximately equal to 35 Imperial gallons (42 U.S. gallons) or
approximately 159 litres.
Bitumen A heavy, viscous oil that must be processed extensively to convert it into a crude oil before it can
be used by reneries to produce gasoline and other petroleum products.
Bitumen Blend In this report, bitumen blend includes upgraded heavy sour crude oil, and bitumen to which light
oil fractions (ie diluent or upgraded crude oil) have been added in order to reduce its viscosity
and density to meet pipeline specications.
Coker The processing unit in which bitumen is cracked into lighter fractions and withdrawn to start the
conversion of bitumen into upgraded crude oil.
Condensate A mixture of mainly pentanes and heavier hydrocarbons. It may be gaseous in its reservoir state
but is liquid at the conditions under which its volumes is measured or estimated.
Crude oil (Conventional) A mixture of pentanes and heavier hydrocarbons that is recovered or is recoverable at a well from
an underground reservoir. It is liquid at the conditions under which its volumes is measured or
estimated and includes all other hydrocarbon mixtures so recovered or recoverable except raw
gas, condensate, or bitumen.
Crude Oil (heavy) Crude oil is deemed, in this report, to be heavy crude oil if it has an API of 27 or less.
No differentiation is made between sweet and sour crude oil that falls in the heavy category
because heavy crude oil is generally sour.
Crude Oil (medium) Crude oil is deemed, in this report, to be medium crude oil if it has an API greater than 27
but less than 30. No differentiation is made between sweet and sour crude oil that falls in the
medium category because medium crude oil is generally sour.
Crude oil (synthetic) A mixture of hydrocarbons, similar to crude oil, derived by upgrading bitumen from the oil sands.
Density The mass of matter per unit volume.
Dilbit Bitumen that has been reduced in viscosity through addition of a diluent (or solvent) such as
condensate or naphtha.
Diluent Lighter viscosity petroleum products that are used to dilute bitumen for transportation in
pipelines.
Extraction A process unique to the oil sands industry, in which bitumen is separated from their source (oil
sands).
Feedstock In this report, feedstock refers to the raw material supplied to a renery or oil sands upgrader.
Integrated mining A combined mining and upgrading operation where oil sands are mined from open pits.
project The bitumen is then separated from the sand and upgraded by a rening process.
In Situ recovery The process of recovering crude bitumen from oil sands other than by surface mining.
Merchant upgrader Processing facilities that are not linked to any specic extraction project but is designed to
accept raw bitumen on a contract basis from producers.
Oil Condensate, crude oil, or a constituent of raw gas, condensate, or crude oil that is recovered in
processing and is liquid at the conditions under which its volume is measured or estimated.
Oil sands Refers to a mixture of sand and other rock materials containing crude bitumen or the crude
bitumen contained in those sands.
Oil Sands Deposit A natural reservoir containing or appearing to contain an accumulation of oil sands separated or
appearing to be separated from any other such accumulation. The ERCB has designated three
areas in Alberta as oil sands areas.
Pentanes Plus A mixture mainly of pentanes and heavier hydrocarbons that ordinarily may contain some
butanes and is obtained from the processing of raw gas, condensate or crude oil.
PADD Petroleum Administration for Defense District that denes a market area for crude oil in the U.S.
Rened Petroleum End products in the rening process (e.g. gasoline).
Products
Specication Dened properties of a crude oil or rened petroleum product.
SynBit A blend of bitumen and synthetic crude oil that has similar properties to medium sour crude oil.
Upgrading The process that converts bitumen or heavy crude oil into a product with a lower density and
viscosity.
West Texas Intermediate WTI is a light sweet crude oil, produced in the United States, which is the benchmark grade of
crude oil for North American price quotations.
Acronyms
API American Petroleum Institute
CAPP Canadian Association of Petroleum Producers
CSS Cyclic Steam Stimulation
DRA Drag Reducing Agent
EIA Energy Information Administration
ERCB (Alberta) Energy & Resources Conservation Board
IEA International Energy Agency
PADD Petroleum Administration for Defense District
S sulphur
SAGD Steam Assisted Gravity Drainage
U.S. United States
WCSB Western Canada Sedimentary Basin
WTI West Texas Intermediate
Canadian Provincial Abbreviations
AB Alberta
BC British Columbia
MB Manitoba
NWT Northwest Territories
ON Ontario
QC Qubec
Units
b/d barrels per day
Conversion Factor
1 cubic metre = 6.293 barrels (oil)
APPENDIX A
ACRONYMS, ABBREVIATIONS,
UNITS AND CONVERSION FACTORS
U.S. State Abbreviations
AL Alabama
AK Alaska
AZ Arizona
AR Arkansas
CA California
CO Colorado
CT Connecticut
DE Delaware
GA Georgia
ID Idaho
IL Illinois
IN Indiana
IA Iowa
KS Kansas
KY Kentucky
LA Louisiana
ME Maine
MD Maryland
MA Massachusetts
MI Michigan
MN Minnesota
MS Mississippi
MO Missouri
MT Montana
NE Nebraska
NV Nevada
NH New Hampshire
NJ New Jersey
NM New Mexico
NY New York
ND North Dakota
OH Ohio
OK Oklahoma
OR Oregon
PA Pennsylvania
SD South Dakota
TN Tennessee
TX Texas
UT Utah
VT Vermont
VA Virginia
WA Washington
WV West Virginia
WI Wisconsin

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0
0
9
APPENDIX C.1
Crude Oil Pipeline Expansions and Proposals to U.S. Midwest, Ontario,
Qubec and the U.S. East Coast
Pipeline Originating Point End Point
Proposed
In-service Date
Capacity
(thousand b/d)
Enbridge Spearhead - North Flanagan, IL Cushing, OK 3Q 2009 130
TransCanada Keystone Hardisty, AB Patoka, IL December 2009 435
Enbridge North Dakota North Dakota Clearbrook, MN January 2010 52
Enbridge Alberta Clipper Hardisty, AB Superior, WI July 2010 450
TransCanada Keystone Cushing Extension KS/NE border Cushing, OK 4Q 2010 155
Enbridge Chicago Connectivity Flanagan, IL Hartsdale 2012/2013 400
Enbridge Line 6B Expansion Chicago, IL Sarnia, ON 2012/2013 65 to 135
Enbridge Line 6C Grifth, Hartsdale, IN Stockbridge, MI 2012/2013 200
TransCanada Heartland Extension Fort Saskatchewan, AB Hardisty, AB 2012/2013 600
Enbridge Southern Access Extension (also
referred to as part of BP/Enbridge Gulf Access)
Flanagan, IL Patoka, IL 2012+ 400 to 800
Enbridge Line 5 Expansion Superior, WI Sarnia, ON TBD 50
Enbridge Ohio Access Phase 1 Stockbridge, MI Toledo, OH TBD 20
Enbridge Ohio Access Phase 2 Stockbridge, MI Toledo, OH TBD 180
Enbridge Southern Access Expansion Superior, WI Flanagan, IL TBD 800
ExxonMobil Mustang Expansion Lockport, IL Patoka, IL TBD 38
Sunoco Pipeline - to Toledo Marysville, MI Toledo, OH TBD 190 to 288 (light crude)
Sunoco Pipeline - to Philadelphia Buffalo, NY Philadelphia, PA TBD 400
Redeployment of Existing Infrastructure
Enbridge Trailbreaker (Line 9 re-reversal) Sarnia, ON Montral, QC 2012/2013 215
Portland reversal Montral, QC Portland, ME 2012/2013 200
APPENDIX C.2
Crude Oil Pipeline Proposals to the U.S. Gulf Coast
Pipeline Originating Point End Point
Proposed
In-service Date
Capacity
(thousand b/d)
ExxonMobil Pegasus Expansion Patoka, IL U.S. Gulf Coast June 2009 30
TransCanada Keystone XL Hardisty, AB U.S. Gulf Coast 2012/2013 700
BP/Enbridge Gulf Access Phase 1
(new build portion)
Cushing, OK Houston, TX
(and potential Nederland/
Port Arthur, TX extension)
2012+ 150 to 200
BP/Enbridge Gulf Access Phase 2 (Southern
Access Extension portion)
Flanagan, IL Patoka, IL 2012+ 400 to 800
BP/Enbridge Gulf Access Phase 3 Patoka, IL Nederland/Port Arthur, TX 2012+ 500+
TransCanada Louisiana Access Option 1 Patoka, IL New Orleans, LA 2014/2016 400
TransCanada Louisiana Access Option 2 Port Arthur, TX New Orleans, LA 2014/2016 400
Altex Energy Fort McMUrray, Hardisty, AB Beaumont/Port Arthur, TX TBD 425
ExxonMobil /Enbridge Texas Access Patoka, IL Beaumont, TX TBD 445
Sunoco Pipelines to US Gulf Coast Cushing, OK U.S. Gulf Coast TBD 300
Redeployment of Existing Infrastructure
Centurion Pipeline - reversal Cushing, OK Slaughter, TX 4Q 2009 60
BP Pipelines #1 reversal and expansion (part of
BP/Enbridge Gulf Access Phase 1)
Flanagan, IL Cushing, OK 2012+ 150 to 200
Enbridge Ozark reversal (part of BP Enbridge
Gulf Access Phase 2)
Wood River, IL Cushing, OK 2012+ 200+
APPENDIX C.3
Crude Oil Pipeline Expansions and Proposals to the West Coast
Pipeline Originating Point End Point Proposed
In-service Date
Capacity
(thousand b/d)
Kinder Morgan TMX2 Edmonton, AB Kamloops, BC 2012 80
Kinder Morgan TMX3 Kamloops, BC Sumas, BC 2013 320
Enbridge Northern Gateway Edmonton, AB Kitimat, BC 2012 to 2014 500
TransCanada Alberta to California Fort Saskatchewan, AB San Francisco, CA
and/or Los Angeles, CA
2016+ 400
Kinder Morgan TMX Northern Leg Rearguard/Edmonton, AB Kitimat, BC 2014+ 400
APPENDIX D
Crude Oil Pipelines and Reneries
Vancouver to:
Japan - 4,300 miles
Taiwan - 5,600 miles
S.Korea - 4,600 miles
China - 5,100 miles
San Francisco - 800 miles
Los Angeles - 1,100 miles
Prince George
Husky...............12
For Information Contact: (403) 267-1141 / www.capp.ca
2008 Canadian Crude Oil Production
000 m
3
/d 000 b/d
British Columbia 5 34
Alberta 297 1,869
Saskatchewan 70 439
Manitoba 4 24
Northwest Territories 3 18
Western Canada 379 2,383
Atlantic Canada 54 342
Total Canada 433 2,725
Pipeline Tolls (US$ per barrel)
Edmonton to Burnaby (Trans Mountain) 1.60
Anacortes (Trans Mountain) 1.85
Sarnia (Enbridge) 2.75
Chicago (Enbridge) 2.40
Wood River (Enbridge/Mustang/Capwood) 3.25
USGC (Enbridge/Mustang/ExxonMobil) 4.55
Hardisty to Guernsey (Express/Platte) 1.45
Wood River (Express/Platte) 1.75
USGC (Express/Platte/MAP/ExxonMobil) 3.40
USEC to Sarnia (Portland/Montreal/Enbridge) 2.00
St. James to Wood River (Capline/Capwood) 0.65
Freeport to Wood River (Seaway/Ozark) 1.50
Notes 1) Heavy crude adds 20-30%
2) Tolls rounded to nearest 5 cents
3) Tolls in eect July 1, 2009
Approved Crude Oil Pipelines
Flanagan
Port Arthur/
Beaumont
Artesia Slaughter
CENTURION
S
P
E
A
R
H
E
A
D

S
O
U
T
H
Come by Chance
St. Charles
E
X
X
O
N
M
O
B
IL
E
X
X
O
N
M
O
B
IL
E
X
X
O
N
M
O
B
I
L
EXXONMOBIL
Vancouver
Chevron ........... 55
Puget Sound
BP .................................. 230
ConocoPhillips........... 100
Shell............................... 145
Tesoro........................... 115
US Oil ............................. 39
San Francisco
Chevron ...................240
ConocoPhillips.......120
Shell...........................165
Tesoro.......................166
Valero........................170
Great Falls
Montana Rening..... 10
Billings
Cenex............................ 60
ExxonMobil................. 60
Los Angeles
BP ........................................ 275
Chevron ............................. 270
ConocoPhillips................. 139
ExxonMobil....................... 150
Tesoro................................. 100
Valero ................................. 135
Edmonton
Imperial ...........................187
Petro-Canada................125
Shell..................................100
Lloydminster
Husky................................. 29
Husky Upgrader............. 82
Regina
Co-op Renery/
Upgrader .......................100
Moose Jaw
Moose Jaw Asphalt..... 15
Newfoundland
North Atlantic.................. 115
Wyoming
Frontier (Cheyenne)...................... 52
Little America (Casper) ................ 25
Sinclair Oil (Sinclair) ...................... 66
Wyoming (Newcastle).................. 14
Houston/Texas City
BP ....................................460
ConocoPhillips.............247
Deer Park .......................330
ExxonMobil...................567
Houston CITGO............271
Marathon......................... 76
Valero (2)........................390
Three Rivers
Valero..............................100
Corpus Christi
CITGO..............................156
Flint..................................288
Valero..............................315
Lake Charles/Garyville
ConocoPhillips...............239
CITGO................................ 440
Marathon......................... 256
Valero................................ 250
Port Arthur/Beaumont
ExxonMobil................... 349
Motiva............................. 285
Valero.............................. 310
Total................................. 175
Saint John
Irving....................250
Halifax
Imperial ............... 82
Detroit
Marathon...................102
Toledo
BP ................................155
Sunoco.......................160
Lima
Husky..........................165
Canton
Marathon..................... 78
Catlettsburg
Marathon...................226
New Jersey
Sunoco............................. 145
Valero................................ 185
Wood River
WRB..................................... 306
Robinson
Marathon........................... 204
Memphis
Valero................... 195
El Dorado
Lion......................... 70
El Paso
Western Rening......... 125
Oklahoma
ConocoPhillips (Ponca City)............... 187
Sinclair (Tulsa)............................................70
Holly (Tulsa) ................................................85
Valero (Ardmore) ......................................87
Wynnewood...............................................70
Borger/McKee
WRB.................................. 146
Valero............................... 171
Denver/Commerce City
Suncor ............................. 93
Salt Lake City
Big West ..............35
Chevron ..............45
Holly.....................31
Tesoro..................58
Mandan
Tesoro..............60
St. Paul
Flint Hills ............. 320
Marathon.............. 74
McPherson
NCRA.......................................... 85
El Dorado
Frontier....................................130
Coffeyville
Coeyville Resources .........115
Superior
Murphy............ 35
Chicago
BP ............................. 400
ExxonMobil............ 239
PDV .......................... 167
Sarnia
Imperial ............... 121
Nova........................80
Shell.........................74
Suncor ....................85
Nanticoke
Imperial ............... 120
Montreal/Qubec
Petro-Canada........130
Shell..........................126
Valero.......................235
Philadelphia
ConocoPhillips (Trainer)............. 185
Sunoco (Marcus Hook) ............... 178
Sunoco (Philadelphia)................. 335
Warren
United ......... 70
Upgraders
Syncrude (Fort McMurray) ............. 465
Suncor (Fort McMurray) .................. 350
Shell (Scotford)................................... 155
Artesia
Holly.............. 85
Vancouver to:
Japan - 4,300 miles
Taiwan - 5,600 miles
S.Korea - 4,600 miles
China - 5,100 miles
San Francisco - 800 miles
Los Angeles - 1,100 miles
Prince George
Husky...............12
For Information Contact: (403) 267-1141 / www.capp.ca
2008 Canadian Crude Oil Production
000 m
3
/d 000 b/d
British Columbia 5 34
Alberta 297 1,869
Saskatchewan 70 439
Manitoba 4 24
Northwest Territories 3 18
Western Canada 379 2,383
Atlantic Canada 54 342
Total Canada 433 2,725
Pipeline Tolls (US$ per barrel)
Edmonton to Burnaby (Trans Mountain) 1.60
Anacortes (Trans Mountain) 1.85
Sarnia (Enbridge) 2.75
Chicago (Enbridge) 2.40
Wood River (Enbridge/Mustang/Capwood) 3.25
USGC (Enbridge/Mustang/ExxonMobil) 4.55
Hardisty to Guernsey (Express/Platte) 1.45
Wood River (Express/Platte) 1.75
USGC (Express/Platte/MAP/ExxonMobil) 3.40
USEC to Sarnia (Portland/Montreal/Enbridge) 2.00
St. James to Wood River (Capline/Capwood) 0.65
Freeport to Wood River (Seaway/Ozark) 1.50
Notes 1) Heavy crude adds 20-30%
2) Tolls rounded to nearest 5 cents
3) Tolls in eect July 1, 2009
Approved Crude Oil Pipelines
Flanagan
Port Arthur/
Beaumont
Artesia Slaughter
CENTURION
S
P
E
A
R
H
E
A
D

S
O
U
T
H
Come by Chance
St. Charles
E
X
X
O
N
M
O
B
IL
E
X
X
O
N
M
O
B
IL
E
X
X
O
N
M
O
B
I
L
EXXONMOBIL
Vancouver
Chevron ........... 55
Puget Sound
BP .................................. 230
Shell............................... 145
Tesoro........................... 115
US Oil ............................. 39
San Francisco
Chevron ...................240
ConocoPhillips.......120
Shell...........................165
Tesoro.......................166
Valero........................170
Great Falls
Montana Rening..... 10
Billings
Cenex............................ 60
ExxonMobil................. 60
Los Angeles
BP ........................................ 275
Chevron ............................. 270
ConocoPhillips................. 139
ExxonMobil....................... 150
Tesoro................................. 100
Valero ................................. 135
Edmonton
Imperial ...........................187
Petro-Canada................125
Shell..................................100
Lloydminster
Husky................................. 29
Husky Upgrader............. 82
Regina
Co-op Renery/
Upgrader .......................100
Moose Jaw
Moose Jaw Asphalt..... 15
Newfoundland
North Atlantic.................. 115
Wyoming
Frontier (Cheyenne)...................... 52
Little America (Casper) ................ 25
Sinclair Oil (Sinclair) ...................... 66
Wyoming (Newcastle).................. 14
Houston/Texas City
BP ....................................460
ConocoPhillips.............247
Deer Park .......................330
ExxonMobil...................567
Houston CITGO............271
Marathon......................... 76
Valero (2)........................390
Three Rivers
Valero..............................100
Corpus Christi
CITGO..............................156
Flint..................................288
Valero..............................315
Lake Charles/Garyville
CITGO................................ 440
Marathon......................... 256
Valero................................ 250
Port Arthur/Beaumont
ExxonMobil................... 349
Motiva............................. 285
Valero.............................. 310
Total................................. 175
Saint John
Irving....................250
Halifax
Imperial ............... 82
Detroit
Marathon...................102
Toledo
BP ................................155
Sunoco.......................160
Lima
Husky..........................165
Canton
Marathon..................... 78
Catlettsburg
Marathon...................226
New Jersey
Sunoco............................. 145
Valero................................ 185
Wood River
WRB..................................... 306
Robinson
Marathon........................... 204
Memphis
Valero................... 195
El Dorado
Lion......................... 70
El Paso
Western Rening......... 125
Oklahoma
ConocoPhillips (Ponca City)............... 187
Sinclair (Tulsa)............................................70
Holly (Tulsa) ................................................85
Valero (Ardmore) ......................................87
Wynnewood...............................................70
Borger/McKee
WRB.................................. 146
Valero............................... 171
Denver/Commerce City
Suncor ............................. 93
Salt Lake City
Big West ..............35
Chevron ..............45
Holly.....................31
Tesoro..................58
Mandan
Tesoro..............60
St. Paul
Flint Hills ............. 320
Marathon.............. 74
McPherson
NCRA.......................................... 85
El Dorado
Frontier....................................130
Coffeyville
Coeyville Resources .........115
Superior
Murphy............ 35
Chicago
BP ............................. 400
ExxonMobil............ 239
PDV .......................... 167
Sarnia
Imperial ............... 121
Nova........................80
Shell.........................74
Suncor ....................85
Nanticoke
Imperial ............... 120
Montreal/Qubec
Petro-Canada........130
Shell..........................126
Valero.......................235
Philadelphia
ConocoPhillips (Trainer)............. 185
Sunoco (Marcus Hook) ............... 178
Sunoco (Philadelphia)................. 335
Warren
United ......... 70
Upgraders
Syncrude (Fort McMurray) ............. 465
Suncor (Fort McMurray) .................. 350
Shell (Scotford)................................... 155
Artesia
Holly.............. 85
Disclaimer:
This publication was prepared by the Canadian Association of Petroleum Producers (CAPP). While it is believed that the information contained herein is
reliable under the conditions and subject to the limitations set out, CAPP does not guarantee the accuracy or completeness of the information. The use
of this report or any information contained will be at the users sole risk, regardless of any fault or negligence of CAPP.
The Canadian Association of
Petroleum Producers (CAPP)
represents 130 companies that
explore for, develop and produce
natural gas, natural gas liquids,
crude oil, oil sands, and elemental
sulphur throughout Canada. CAPP
member companies produce more
than 90 per cent of Canadas natural
gas and crude oil. CAPP also has
150 associate members that provide
a wide range of services that support
the upstream crude oil and natural
gas industry. Together, these
members and associate members
are an important part of a
$120-billion-a-year national industry
that affects the livelihoods of more
than half a million Canadians.
Calgary Ofce:
2100, 350 - 7 Avenue SW
Calgary, Alberta, Canada
T2P 3N9
Phone: 403-267-1100
Fax: 403-261-4622
St. Johns Ofce:
403, 235 Water Street
St. Johns, Newfoundland
and Labrador
Canada A1C 1B6
Phone: 709-724-4200
Fax: 709-724-4225
www.capp.ca
communications@capp.ca
June 2009
2009 - 0017

2009 CAPP Crude Oil Forecast Markets

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