Canadian oil pipeline capacity remains tight: National Energy Board

By The Canadian Press

CALGARY - Canada's oil pipeline capacity is adequate but tight and more lines are needed soon, the National Energy Board said Thursday.

"Capacity constraints on oil pipelines in Canada were evident in 2007," NEB vice-chair Sheila Leggett stated in releasing the federal regulator's latest pipeline system assessment.

"While there was some spare capacity, periods of apportionment meant that some pipelines were at times not able to fully meet shipper demand."

The report says additional capacity is needed soon, and it notes the surge in recent proposed new pipelines and expansions to carry Canadian oil, largely from the Alberta oilsands, to both traditional consumers and new markets such as the U.S. Gulf Coast, California, and Asia.

"Although some additional capacity will be added in 2008, tight conditions will likely exist for the remainder of the year," the NEB said.

It also noted that natural gas pipeline volumes declined last year, amid stable or declining supply from the Western Canada Sedimentary Basin, growing demand within Western Canada and competition from U.S. gas basins.

The NEB, which regulates 45,000 kilometres oil, gas and petroleum-product pipelines, stated that pipeline companies "are providing services that meet the needs of shippers at reasonable prices" and have the ability to attract financing to maintain and expand their systems.