MEG Energy says Trans Mountain expansion will boost Canadian oil prices ‘for years’

Intermediate oilsands producer MEG Energy Corp. expects the recently completed Trans Mountain pipeline expansion will boost Canadian oil prices for years to come. The MEG Energy Corp. logo is seen in this undated handout photo. THE CANADIAN PRESS/HO, MEG Energy *MANDATORY CREDIT*

CALGARY — Intermediate oilsands producer MEG Energy Corp. expects the recently completed Trans Mountain pipeline expansion will boost Canadian oil prices for years to come.

MEG’s vice-president of marketing Erik Alson made the comments Tuesday on a conference call with analysts.

He said he expects the difference between the benchmark U.S. oil price and the price Canadian oilsands producers receive for their crude will remain narrow for years, thanks to the additional export capacity offered by the Trans Mountain pipeline expansion. 

Canadian heavy oil has historically sold at a discount to lighter U.S. crude, in part due to differences in product quality and transportation costs, but also due to a lack of pipeline export capacity that has limited market access for Canadian oil companies.

The Trans Mountain pipeline expansion, which marked its official opening last week, gives Canadian oil shippers access to an additional 590,000 barrels-per-day of pipeline capacity.

MEG is one of the main beneficiaries of the Trans Mountain expansion, with 20,000 barrels per day of contracted capacity on the pipeline.

This report by The Canadian Press was first published May 7, 2024.

Companies in this story: (TSX:MEG)

The Canadian Press