BUSINESS

Northern Gateway Pipeline Not Needed For Canadian Oil To Reach China: IEA

06/17/2014 02:37 EDT | Updated 06/17/2014 02:59 EDT
Enbridge/YouTube

On the day Enbridge Inc.’s Northern Gateway pipeline project is expected to get the government green light, the International Energy Agency released a report saying the controversial pipeline is unnecessary for the expansion of Canada’s oil and gas exports to China.

The body’s Medium Term Oil Market Report for 2014 projected that Canadian oil shipments to China could reach 300,000 barrels of oil per day by 2019 — a massive figure that does not rely on approval of Northern Gateway, which would transport 525,000 barrels of oil per day.

“These volumes do not depend on the commissioning of new pipelines to evacuate Albertan oil to the Pacific Coast, since according to official data, Canada already exports the odd cargo to China, India, Malaysia and Singapore,” the report stated.

“It is presumed that volumes will grow in the event of an expansion of Canadian companies being permitted to re-export crude via the United States or by increasing volumes being railed to the Pacific Coast.”

Canada could also expand its market reach by ramping up shipments out of the East Coast, the report said.

All the same, the report said that if either or both the Northern Gateway or Kinder Morgan’s Trans-Mountain Express pipeline are in commission by 2019, “Canadian exports to the Pacific Basin could steeply increase.”

Northern Gateway, expected to be in operation by 2018 if it receives approval, would carry crude from Alberta’s oilsands to a port in Kitimat, B.C., where it would be loaded onto tankers and shipped abroad.

The $7.9-billion project was approved by the National Energy Board and Canadian Environmental Assessment Agency last year with 209 conditions. However, the 1,200 kilometre-long pipeline remains a point of contention for the B.C. government, aboriginal and environmental groups. Several aboriginal groups have already said they would challenge an approval in court.

Overall, the IEA projects Canada’s oil output will grow steadily to 5.2 millions of barrels of oil per day in 2019, up from four million barrels per day at present.

But that growth will depend on finding new international markets for Canadian oil, outside of the country’s main customer, the U.S., the report said.

Also on HuffPost

Celebs Against The Oilsands