Pipeline Pinch Adds to Oil-Sands Woes as Keystone Wait Drags

Producers have little choice but to move those extra barrels by train, with costs two to three times higher than pipeline shipping. (Bloomberg) — Call it the pipeline pinch, or maybe the Keystone quagmire. While plans by Canadian companies from Suncor Energy Inc. to Canadian Natural Resources Ltd. to boost oil output are racing to fruition, the construction of three pipelines needed to move that product to market, including the infamous Keystone XL, is lagging years behind. The end result: Producers have little choice but to move those extra barrels by train, with costs two to three times higher than pipeline shipping. It’s an unwelcome added expense after oil plunged about 20 percent from this year’s peak. Futures prices have settled in below $45 a barrel, after many predicted it would rise to $60. “We’re not going to see significant new pipeline capacity until late 2019 or 2020,” said […]

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