Canadian Energy Centre
Canada remains on the sidelines as global competitors double down on energy projects
![](https://www.todayville.com/wp-content/uploads/2023/01/tvrd-tvrd-cec-vladimir-putin-image-2023-01-31.jpg)
By Deborah Jaremko of the Canadian Energy Centre
From the Taliban to Russia, billions in oil and gas investment underway around the world
As Canada’s oil and gas industry faces the uncertainty of a looming emissions cap and a “Just Transition,” billions of dollars of investment is underway in other countries to grow oil and gas supply for the future.
Here’s just a handful of examples.
Afghanistan – Amu Darya basin
US$690 million
Xinjiang Central Asia Petroleum and Gas Co.
![](https://i0.wp.com/www.todayville.com/wp-content/uploads/2023/01/tvrd-tvrd-cec-afghan-china-oil-mullah-abdul-ghani-baradar-image-2023-01-31.jpg?resize=622%2C454&ssl=1)
Afghan Deputy PM Mullah Abdul Ghani Baradar at a news conference in Kabul announcing an oil development agreement with Xinjiang Central Asia Petroleum and Gas Co. Photo: Twitter/Zabihullah Mujahid
In January, Chinese state-owned Xinjiang Central Asia Petroleum and Gas Co. signed a deal with the Taliban-controlled Afghanistan government to invest nearly US$700 million over four years on oil development in the country’s north.
The 25-year contract also involves building Afghanistan’s first oil refinery.
The Taliban militant group returned to power in Afghanistan after the withdrawal of U.S. forces in 2021. Its ownership share of the oil project will gradually rise to 75 per cent, according to spokesman Zabihullah Mujahid.
The Taliban maintains close ties with the terrorist group al-Qaeda, according to the Council on Foreign Relations (CFR). Since resuming its rule in Afghanistan, authorities have resumed public floggings and executions, violently cracked down on protesters and activists, “obliterated” women’s rights, and “enforced prohibitions on behavior deemed un-Islamic,” the CFR says.
Brazil – Santos Basin
TotalEnergies
US$1 billion
![](https://i0.wp.com/www.todayville.com/wp-content/uploads/2023/01/tvrd-tvrd-cec-totalenergies-brazil-image-2023-01-31.jpg?resize=455%2C454&ssl=1)
Map courtesy TotalEnergies
France-based TotalEnergies announced in January it will go ahead with a US$1 billion expansion of oil production offshore Brazil.
The development is located about 300 kilometres off the coast in the Santos Basin. TotalEnergies, which has operated in Brazil for more than 40 years, is 45 per cent owner along with partners Shell, Repsol and Sinopec.
The project will consist of three new deepwater wells connected to an existing floating production and storage vessel. It is expected to increase production to 60,000 barrels per day in 2025, up from about 35,000 barrels per day today.
Norway – Norwegian Continental Shelf
Aker BP
US$29 billion
![](https://i2.wp.com/www.todayville.com/wp-content/uploads/2023/01/tvrd-tvrd-cec-norway-offshort-aker-bp-image-2023-01-31.jpg?resize=740%2C416&ssl=1)
Rendering courtesy Aker BP
Oslo, Norway-based Aker BP and its partners filed formal plans in December for four offshore oil and gas projects on the Norwegian Continental Shelf.
A total investment of nearly US$30 billion, the developments are expected to increase Aker BP’s oil and gas production to around 525,000 barrels per day in 2028, compared to 400,000 in 2022.
The company’s strategy is to meet the world’s growing need for energy while simultaneously contributing to reducing emissions, said CEO Karl Johnny Hersvik.
The projects are enabled by a 2020 government stimulus package that “allowed oil companies to embark upon new commitments,” he said.
Qatar – North Field East LNG expansion
Qatar Energy
US$29 billion
![](https://i2.wp.com/www.todayville.com/wp-content/uploads/2023/01/tvrd-tvrd-cec-qatar-france-north-field-east-lng-image-2023-01-31.jpg?resize=686%2C454&ssl=1)
Qatar’s Minister of State for Energy Affairs and QatarEnergy CEO Saad Sherida al-Kaabi (R) and TotalEnergies CEO Patrick Pouyanne announce partnership in the giant North Field East LNG project at the QatarEnergy headquarters in Doha on June 12, 2022. Getty Images photo
One of the world’s largest LNG exporters is expanding its capacity with the largest LNG project ever built.
State-owned QatarEnergy’s US$29 billion North Field East Expansion will increase the country’s LNG export capacity to 110 million tonnes per year, from 77 million tonnes per year. Startup is expected in late 2024.
A planned second phase of the project will further increase capacity to 126 million tonnes per year. QatarEnergy’s partners include Shell, TotalEnergies, Exxon Mobil, ConocoPhillips and Eni.
World LNG demand reached a record 409 million tonnes in 2022, according to data provider Revintiv. It’s expected to rise to over 700 million tonnes by 2040, according to Shell’s most recent industry outlook.
Russia – Vostok Oil
Rosneft
US$170 billion
![](https://i1.wp.com/www.todayville.com/wp-content/uploads/2023/01/tvrd-tvrd-cec-russia-india-oil-deal-image-2023-01-31.jpg?resize=700%2C394&ssl=1)
Russian President Vladimir Putin and executives with state oil company Rosneft present a major shipbuilding complex to Indian Prime Minister Narendra Modi. India will be an investor in a new US$170 billion oil project in the Russian Arctic. Photograph courtesy Rosneft
Despite the war in Ukraine and wide-ranging energy sanctions, Russian state-owned oil company Rosneft says work continues to advance on schedule for the massive Vostok oil project.
The US$170 billion project will use the Northern Sea Route to export about 600,000 barrels per day by 2024. Production is expected to increase to two million barrels per day after the second phase.
Rosneft reports that as of mid-2022, more than 1,000 units of special construction equipment are in operation, as well as seven new Russian arctic class drilling rigs, with another five on the way. Over 4,000 people and 2,000 vehicles have been mobilized.
“This means that the project lives and develops as planned, the inevitable difficulties are being overcome, but we have full confidence that all the tasks will be completed,” Rosneft CEO Igor Sechin said.
“In the context of decreasing investment in the oil and gas sector, Vostok Oil is the only project in the world capable to provide a stabilizing effect on the hydrocarbon markets.”
From the Canadian Energy Centre Ltd.
Alberta
Start-up of Trans Mountain expansion ‘going very well’ as global buyers ink deals for Canadian crude
![](https://www.todayville.com/wp-content/uploads/2024/07/tvrd-cec-view-from-trans-mountain-burnaby-terminal-image-2024-07-18.jpg)
A worker at Trans Mountain’s Burnaby Terminal. Photo courtesy Trans Mountain Corporation
From the Canadian Energy Centre
Chinese refiner pays about US$10 more for oil off TMX compared to sales value in Alberta
Canada’s oil sands producers are “back in the limelight” for investors following completion of the Trans Mountain pipeline expansion, according to a report by Enervus Intelligence Research.
For the first time in the better part of a decade, there is now breathing room on the system to ship all of the oil producers are able to sell off the coast of B.C.
Up until this May, Trans Mountain was regularly overbooked. Not anymore.
The crude carrier Dubai Angel picked up the first shipment from the long-awaited expansion on May 22, setting sail for China and a customer of oil sands producer Suncor Energy.
Analysts estimate Trans Mountain loaded 20 vessels in June, compared to a pre-expansion average of five per month.
“You’re seeing multiple buyers. It’s going very well,” said Phil Skolnick, managing director of research with New York-based Eight Capital.
“You’re seeing the exact buyers that we always thought were going to show up, the U.S. west coast refineries and as well as the Asian refineries, and there was a shipment that went to India as well.”
The “Golden Weld” in April 2024 marked the mechanical completion and end of construction for the Trans Mountain expansion project. Photo courtesy Trans Mountain Corporation
Canadian crude in demand on the global market
Asian markets – particularly China, where refineries can process “substantial quantities” of extra heavy crude and bitumen – are now “opened in earnest” to Canadian oil, the International Energy Agency (IEA) said in its June Oil 2024 report.
“There’s demand for this crude and people are going to make deals,” said Kevin Birn, chief analyst of Canadian oil markets with S&P Global.
The IEA said Canadian crude will increasingly compete with heavy oil from other countries, particularly those in Latin America and the Middle East.
June’s loading of 20 vessels is slightly lower than the 22 vessels Trans Mountain had targeted, but Skolnick said a few bumps in the project’s ramp-up are to be expected.
“About three months ago, the shippers were telling investors on their calls, don’t expect it to be a smooth ramp up, it’s going to be a bit bumpy, but I think they’re expecting by Q4 you should start seeing everyone at peak rates,” Skolnick said.
Delivering higher prices
Trans Mountain’s expanded Westridge Terminal at Burnaby, B.C. now has capacity to load 34 so-called “Aframax” vessels each month.
One of the first deals, with Chinese refiner Rongsheng Petrochemical, indicates the Trans Mountain expansion is delivering on one of its expected benefits – higher prices for Canadian oil.
Canada’s Parliamentary Budget Office has said that an increase of US$5 per barrel for Canadian heavy oil over one year would add $6 billion to Canada’s economy.
The June deal between Rongsheng and an unnamed oil sands shipper saw a shipment of Access Western Blend (AWB) purchased for approximately US$6 per barrel below the Brent global oil benchmark. That implies an AWB selling price of approximately US$75 per barrel, or about US$10 more than the price received for AWB in Alberta.
Expanded export capacity at the Trans Mountain Westridge Terminal. Photo courtesy Trans Mountain Corporation
More pipeline capacity needed
Oil sands production – currently about 3.4 million barrels per day – is projected to rise to 3.8 million barrels per day by the end of the decade before declining slightly to about 3.6 million barrels per day in 2035, according to the latest outlook by S&P Global.
“Despite the recent completion of the Trans Mountain Expansion project, additional capacity will still be needed, likely via expansion or optimization of the existing pipeline system,” wrote Birn and S&P senior research analyst Celina Hwang in May.
“By 2026, we forecast the need for further export capacity to ensure that the system remains balanced on pipeline economics.”
Uncertainty over the federal government’s proposed oil and gas emissions cap “adds hesitation” to companies considering large-scale production growth, wrote Birn and Hwang.
Global oil demand rising
World oil demand, which according to the IEA reached a record 103 million barrels per day in 2023, is projected to continue rising despite increased investment in renewable and alternative energy.
A June outlook by the International Energy Forum (IEF) pegs 2030 oil demand at nearly 110 million barrels per day.
“More investment in new oil and gas supply is needed to meet growing demand and maintain energy market stability, which is the foundation of global economic and social well-being,” said IEF secretary Joseph McMonigle.
Canadian Energy Centre
What’s next? With major projects wrapping up, what does Canada’s energy future hold
![](https://www.todayville.com/wp-content/uploads/2024/06/tvrd-cec-lng-canada-terminal-kitimat-b.c.-image-2024-06-10.jpg)
From the Canadian Energy Centre
By Mario Toneguzzi‘This is the first time Canada will enter the global marketplace as a global player, so it is an incredibly important change for the industry’
With the recent completions of the Trans Mountain expansion and Coastal GasLink pipelines, and the looming completion of LNG Canada within the next year, there are few major energy projects with the green light for one of the world’s largest and most responsible energy producers.
Which leaves a lingering question: In a world that has put a premium on energy security, what’s next for Canada?
Heather Exner-Pirot, a senior fellow and director of the natural resources, energy and environment program at the Macdonald-Laurier Institute, said Natural Resources Canada’s major projects inventory “has been in a pretty sharp decline since 2015, which is concerning.”
“It’s not just oil and gas but also mining, also electricity . . . It’s the overall context for investment in Canada,” said Exner-Pirot, who is also a special adviser to the Business Council of Canada.
“When we look at BC, we see TMX, Coastal GasLink, very soon LNG Canada will be finishing up. That’s probably in the order of $100 billion of investment that that province will lose.
“So you do start to think about what happens next. But there are some things on the horizon. I think that’s part of it. Other LNG projects where maybe it wasn’t politically popular, it wasn’t a social license, and maybe the labour force was also constrained, and now is opening opportunities.”
A recent analysis conducted by Exner-Pirot found that between 2015 and 2023, the number of energy and natural resource major projects completed in Canada dropped by 37 per cent. And those that managed to be completed often faced significant delays and cost overruns.
One notable project Exner-Pirot expects to fill the void is Ksi Lisims LNG, which is being developed on the northwest coast of Canada to export low-carbon LNG to markets in Asia. The project represents a unique alliance between the Nisga’a Nation, Rockies LNG and Western LNG.
Ksi Lisims LNG is a proposed floating LNG export facility located on a site owned by the Nisga’a Nation near the community of Gingolx in British Columbia.
The project will have capacity to produce 12 million tonnes of LNG per year, destined for markets in the Pacific basin, primarily in Asia where demand for cleaner fuels to replace coal continues to grow.
Rendering of the proposed Ksi Lisims floating LNG project. Image courtesy Ksi Lisims LNG
As well, the second phase of the LNG Canada export terminal in Kitimat, B.C. shows increasing signs of moving forward, which would roughly double its annual production capacity from 14 million tonnes to 26 million tonnes, Exner-Pirot added.
While nearby, Cedar LNG, the world’s first Indigenous-owned LNG export facility, is closing in on the finish line with all permits in place and early construction underway. When completed, the facility will produce up to three million tonnes of LNG annually, which will be able to reach customers in Asia, and beyond.
According to the International Energy Agency, the world is on track to use more oil in 2024 than last year’s record-setting mark. Demand for both oil and natural gas is projected to see gradual growth through 2050, based on the most likely global scenario.
Kevin Birn, chief analyst for Canadian oil markets at S&P Global, said despite the Trans Mountain expansion increasing Canada’s oil export capacity by 590,000 barrels per day, conversations have already begun around the need for more infrastructure to export oil from western Canada.
“The Trans Mountain pipeline, although it’s critical and adds the single largest uplift in oil capacity in one swoop, we see production continue to grow, which puts pressures on that egress system,” he said.
Photo courtesy Trans Mountain Corporation
Birn said Canada remains a major global player on the supply side, being the world’s fourth-largest producer of oil and fifth-largest producer of natural gas.
“This is a really important period for Canada. These megaprojects, they’re generational. These are a once-in-a-generation kind of thing,” Birn said.
“For Canada’s entire history of being an oil and gas producer, it’s been almost solely reliant on one single export market, which is the United States. That’s been beneficial, but it’s also caused problems for Canada in that reliance from time to time.
“This is the first time Canada will enter the global marketplace as a global player, so it is an incredibly important change for the industry.”
Exner-Pirot said Canada has the ability to become a major exporter on the energy front globally, at a time when demand is accelerating.
“We have open water from B.C. to our allies in Asia . . . It’s a straight line from Canada to its allies. This is a tremendous advantage,” she said, noting the growth of data centres and AI is expected to see demand for reliable energy soar.
“We are seeing growing electricity demand after decades of plateauing because our fridges got more energy efficient and our washers and dryers got more energy efficient. Now we’re starting to see for the first time in a long time more electricity demand even in developed countries. These are all drivers.”
-
Brownstone Institute1 day ago
The Media Refuses to Accept Covid Reality
-
Alberta1 day ago
‘Fireworks’ As Defence Opens Case In Coutts Two Trial
-
National1 day ago
Liberals offer no response as Conservative MP calls Trudeau a ‘liar’ for an hour straight
-
COVID-191 day ago
Leaked documents: German gov’t lied about shots preventing COVID, knew lockdowns did more harm than good
-
Frontier Centre for Public Policy2 days ago
Cowering before carbon
-
Business1 day ago
Federal government seems committed to killing investment in Canada
-
International1 day ago
Switzerland’s new portable suicide ‘pod’ set to claim its first life ‘soon’
-
Business1 day ago
Estonia’s solution to Canada’s stagnating economic growth