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As Countries Shun Russian Crude, Canada Plans to Boost Its Oil Exports
04/01/2022
Jonathan Wilkinson, Canada's natural resources minister, reports that his country is looking at ways to increase pipeline utilization to boost crude exports as Europe seeks to reduce its reliance on Russian oil.
Enbridge Inc., the operator of the Southern Lights pipeline (part of the Mainline pipeline system), is in talks with the government, looking for ways to ease the current energy crisis. Network capabilities are the main point of discussion, as well as how fully they are utilized. Increasing exports to Europe is a key goal of the Canadian government.
At the moment, oil exports from Canada to the U.S. are approximately 4 million barrels of oil per day, with a small portion reexported to other countries. And this number is poised to rise.
In addition to Enbridge's Mainline pipeline, TC Energy's Keystone pipeline carries another 590,000 barrels/day of crude oil to the United States. However, no comment was provided by TC Energy as of yet.
What is known in the meantime, is that Enbridge's liquids and natural gas pipelines are near or at capacity, but the company has begun examining potential ways to supply more energy to U.S. and European markets. That strategy includes using facilities on the Gulf Coast for crude oil and natural gas export as one of the most feasible options.
This situation unveils following the geopolitical crisis in Eastern Europe. The Canadian government and other nations vowed not to import Russian oil after its military aggression in Ukraine. European leaders agreed to cut their reliance on Russian fossil fuels on March 10.
Ukraine's war has shown all of the European countries that they cannot be dependent on Russian oil and gas for long, which has sped up discussions about transitioning from natural gas to hydrogen. However, this cannot be done overnight.
Together with industry, the Canadian government is also analyzing how pipeline flows can be increased in response to such violence, but the extent of what can be done will not be known for another week.
Despite the fact that Canada is willing to increase pipeline export capacity, many producers have been reluctant to adjust their spending plans, which could significantly increase output.
There are currently no LNG export terminals in Canada, but a consortium led by Shell Plc and Petroliam Nasional Bhd is building a large facility on the west coast that will be open by the middle of the decade.
This will come in handy, as even by the end of 2021 Canadian oil companies exported a record amount of crude from the U.S. Gulf Coast, mostly to big importers India, China, and South Korea.
If you wish to learn more about pipeline routes or get a better understanding of the location of strategic resources, contact our Houston sales office or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
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To Be or Not To Be: Bakken Assets Could Fetch $5 Billion for Exxon Mobil
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Exxon Mobil Corp. is weighing prospects of selling its assets in North Dakota’s Bakken, after gauging interest from potential buyers — 5 billion is the issue price, at least according to rumors. The price point came about after the news that the oilgiant is in the final round of hiring bankers to help launch the sale. Yet Exxon Mobil itself stays tight-lipped regarding the situation.
Major: Ameredev II Oil Producer to be Sold for $4 Billion by EnCap
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In light of the conflict in Ukraine, buyout firms are currently scurrying to make cash from the U.S. crudeprices reaching their highest level since 2008. And one of the largest privately-owned US-based oilproducers may be up for sale. EnCap Investments looks to sell its portfolio company Ameredev II for over $4 billion including debt. It’s important to note, however, that both EnCap and Ameredev II alike are staying tight-lipped on the matter.
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In order to sell its part of the sprawling Eagle Ford Shale acreage, Chesapeake Energy Corp. on January 18 concluded an agreement to trade its Brazos Valley region assets to WildFire Energy I LLC for $1.425 billion.
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On January 6, Phillips 66 announced that it plans to acquire more than 43% of DCP Midstream LP for $3.8 billion, expanding the business in the oil & gas business.
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On January 5 Northern Oil & Gas (NOG) concluded a deal to acquire working interests in Midland-Petro D.C. Partners LLC (MPDC)'s Mascot Project in the Midland Basin, according to a January 9 press release. Firstly estimated at $330 million in cash, the deal was signed with an additional 3.25% working interest added to the 36.7% agreed upon when the transaction was announced on October 19. NOG paid $29 million more for the additional interests, which now totalled 39.958%. Finally, the deal closed for $320 million in cash and $43 million in debt at signing in October with the finance of Minnetonka, Minn.-based NOG with cash on hand, operating free cash flow, and assistance from its revolving credit facility.