Pipeline Capacity to Outpace Canadian Oil Growth Through 2035

Enverus Intelligence Research (EIR) forecasts that pipeline infrastructure in Western Canada will grow faster than production demand through the latter part of the next decade. The analysis indicates that output from the Western Canada Sedimentary Basin is expected to increase by approximately 200,000 barrels per day annually until 2035. For most of this period, available transport capacity is projected to exceed producer requirements, reducing the risk of congestion and the associated price discounts that have previously constrained operator margins.

The report identifies roughly 1 million barrels per day of confirmed additional takeaway capacity from system upgrades and new projects. EIR expects Western Canadian Select pricing to remain between $12 and $15 per barrel below West Texas Intermediate, a spread largely driven by the costs of transporting crude to the U.S. Gulf Coast. With transport constraints expected to loosen, production-side factors such as capital spending and diluent availability will become the primary determinants of growth pace.

Proposed Projects Drive Capacity Expansion

Among proposed new-build pipelines, the Prairie Connector-Bridger line is ranked as the leading candidate due to secured backing and industry support. The project has locked in shipping agreements for 465,000 barrels per day over a two-decade period. The West Coast Oil Pipeline ranks second, offering the largest design capacity among contenders at over 1 million barrels per day. These additions are critical to accommodating the projected expansion of the crude network.

Oil Sands Growth Faces Diluent Limits

EIR projects that oil sands output will add 1.3 million barrels per day by 2035, provided producers maintain sufficient capital discipline. However, the availability of diluent is flagged as a potential limiting factor. As oil sands volumes increase, the demand for condensate could rise by approximately 500,000 barrels per day by the mid-2030s. This surge in diluent requirements may create additional infrastructure demands that could offset some of the benefits from expanded pipeline capacity.

Shift in Constraints for Producers

Kyle Bertamini, a principal analyst at EIR, noted that the trajectory for Canadian oil output is shifting as pipeline capacity moves ahead of producer demand. This change lessens the likelihood of transport constraints becoming the main obstacle to growth. Instead, capital decisions and diluent supply will increasingly shape how much of the available pipeline space is utilized. The focus for operators is moving from securing transport slots to managing production inputs and financial commitments.