New 500 Mb/d Alberta-to-Ontario Crude Oil Pipeline Proposed

On July 6 the Premiers of Alberta and Ontario’s provincial governments unveiled a potential route for a new 3,300 km (2,050-mile) crude oil pipeline from Hardisty, AB to Sarnia, ON that would pass through Northern Ontario (see map below). The pipeline is envisioned to have 500 Mb/d of capacity initially, expandable up to 800 Mb/d.

This announcement follows an agreement made last year by the provincial governments of Ontario, Alberta, and Saskatchewan to work on plans to build new pipelines through an economic corridor from Alberta to Ontario that they are calling the Northern Shield Energy Corridor.

Enbridge's Mainline system, which last year delivered 766 Mb/d of crude oil and NGLs into Sarnia, is typically the source of all of the crude oil feedstocks for Ontario's four refineries, as well as for United Refining's 65 Mb/d refinery in Warren, PA, and is also the source for about two-thirds of Quebec's refinery feedstocks.

At a press conference held July 6, the Premiers further explained their motivations for this proposed pipeline, which include:

• critical redundancy (while not mentioned specifically, this is likely a reference to Michigan's ongoing pursuit of legal efforts to shut down Enbridge's Line 5/Lakehead pipeline, which delivers most of the crude oil to Sarnia and crosses Michigan's Mackinaw Straits)
• facilitating the potential for a strategic petroleum reserve in Sarnia
• providing opportunities for refinery expansions in Ontario
• providing opportunity for a pipeline extension to a potential port export facility at Churchill, MB on Hudson's Bay
• providing opportunity for a pipeline extension to the St. Lawrence seaway to access Atlantic markets (Quebec and New Brunswick together imported 401 Mb/d of crude oil from other countries last year)

Ontario expects to have a feasibility study completed by the end of the year. When asked about their plans for who would own the pipeline, the Premiers expressed a preference for private sector involvement, but remained open to government ownership.