Delays in building new pipelines from Canada’s oil sands fields have generated record shipments of oil-by-rail in May in Canada. The Edmonton Sun reports:
New data from the National Energy Board shows Canadian oil companies shipped an average of 198,788 barrels of oil per day on railway cars in May, the latest month for which data is available, marking a record high and a 42 per cent increase over the 130,916 bpd shipped on rail in the same month a year earlier. Over the same period, Canadian oil production is expected to have risen to 4.5 million bpd, from 3.9 million bpd according to an NEB forecast.
The dramatic increase has come as new pipelines have been delayed and operators are rationing space on existing pipelines as more oil is being produced in Western Canada than can fit into the country’s current pipe network.
“The pipelines remained constrained,” IHS Markit vice-president, North American crude oil markets Kevin Birn said, adding that the ramp up in crude oil by rail shipments is expected to continue. IHS Markit has estimated Canadian producers would ship between 200,000 bpd and 300,000 bpd on railway cars this year.
Last week, a handful of major Canadian oil companies indicated that they were working to secure more rail terminal capacity amid the pipeline shortage.
Read more here.