Oilsands price discounts expected to rise as output exceeds export pipeline room
CALGARY — Canadian oilsands producers face rising price discounts as growing production “materially exceeds” export pipeline capacity to the United States in the first quarter of 2018, RBC Dominion Securities says in a new research report.
The report comes as the price differential between oilsands crude and its U.S. counterpart posted recently widened to more than US$25 because of recent events including reduced volumes on the Keystone pipeline system between Alberta and the U.S. Gulf Coast after a leak in South Dakota.
Production from the northern Alberta oilsands is set to climb by nearly 620,000 barrels per day over the next four years to 3.3 million bpd in 2021 before levelling off, it says.
About 75 per cent of the growth will be in raw bitumen — which must be blended with light petroleum products to flow in a pipeline, thus increasing volume by another 30 to 40 per cent.