A recent report from Deloitte Canada predicts that production of oil in Canada is set to reach a record high by 2025, largely thanks to the Trans Mountain pipeline expansion project.
The report says that the pipeline, connecting Alberta’s oil sands to the West Coast, will add approximately 375,000 barrels of oil per day to Canada’s production output.
Current projections indicate that the Trans Mountain Expansion will be completed by 2024 and enter into operation.
The completed pipeline will increase Canada’s oil production by 8% compared to its previous peak in November 2022 and nearly nine percent compared to June 2023.
The growth is more than what Canada’s oil production has increased in the past five years combined.
“The increase in volume is notable: it’s greater than the total amount added to Canada’s production levels over the past five years combined,” analysts wrote.
The pipeline expansion will also help Canada sell its oil to more places beyond the United States.
Right now, most of Canada’s oil goes to the U.S., but this expansion will reduce that dependency.
In 2018, the Trans Mountain Expansion was purchased by the federal government for $4.5 billion. To date, the government has considered selling the project to Indigenous groups.
According to the report, this is expected to make Canadian oil prices closer to U.S. prices, which will be good for Canadian oil producers.
Most of the new oil production will be due to oil sands development, where innovation is making it cheaper and faster to get the oil.
The report also mentions that, despite more oil being produced in Canada and the U.S., global oil prices will likely stay high in 2024.
This is not the only recent good news the oil and gas industry has heard.
Estimates reported by the Canadian Energy Centre earlier this month reveal that the oil sands sector will generate nearly half a trillion dollars in tax revenues for Canadians.
