Several western Canadian oil storage and pipeline infrastructure projects have been delayed or put on indefinite hold due to the relatively weak crude prices.
According to Genscape, as the price of oil began to drop throughout the second half of 2014 and most of 2015, companies that has announced major infrastructure projects between January 2011 and June 2014 put their projects on hold despite production increasing.
Such companies include Enbridge and TransCanada.
Oil transportation analyst Derek Wenning says that TransCanada said in a 2015 annual report filed with the SEC that the affect the price environment was having on 2015 could ‘impact the timing for the demand of transportation services and/or new liquids pipeline infrastructure’. The company has had multiple project delays in the past year.
TransCanada announced the TC Terminal and Heartland Pipeline projects in 2013. The terminal would comprise six crude storage tanks, increasing the overall capacity in the Alberta Heartland region by 1.9 million barrels. The pipeline, which would connect the terminal to Edmonton, Alberta and Hardisty, would have an estimated capacity of 900,000 barrels per day.
The pipeline progress has been affected by regulatory permitting delays of the Keystone XL and Energy East projects. The company has since said that the projects would be delayed indefinitely, stating ‘the in-service date for the projects will be determined and aligned with industry conditions and customer’s requirements’.