Canada must look at ways to diversify its oil export markets, both in the short term as well as by exploring a long-term solution like a new east-west pipeline, the president of Canadian Natural Resources Ltd (CNQ.TO), said on Thursday.
Scott Stauth said Canadian Natural, Canada’s largest oil and gas producer, supports plans made public recently by pipeline companies Enbridge Inc. and Trans Mountain Corp. to improve oil transport capabilities through optimizing and de-bottlenecking existing lines.
“We think those discussions are very prudent,” Stauth said in an interview following a conference call in which Canadian Natural discussed its fourth-quarter financial results.
“I also think as Canadians we should be looking at even larger and more long-term project opportunities to create broader markets for our oil, even outside of North America.”
Stauth’s comments come just days after U.S. President Donald Trump imposed 25% tariffs on Canadian and Mexican imports and a 10% levy on Canada’s energy imports.
Canada exports approximately 4 million barrels per day, about 90% of its total crude exports, to the United States.
Canada achieved record oil production in 2024, as the completion of the Trans Mountain pipeline expansion boosted the ability of oil companies to get their product to market.
The Trans Mountain pipeline runs from the oil-producing province of Alberta to the British Columbia West Coast, where crude can be loaded onto tankers and shipped overseas.
In the wake of the tariffs threat, Trans Mountain Corp has said it is looking at expansion projects that could add between 200,000 and 300,000 barrels per day of capacity to the company’s system.
But competitor Enbridge has said the tariffs would need to be in place for years before significantly altering U.S. demand for Canadian crude. The company plans to invest approximately C$2 billion ($1.7 billion) into boosting its Mainline pipeline network, which carries crude from Alberta to eastern Canada and the U.S. Midwest.
South Bow Corp. (SOBO.TO), the Canadian company that operates the Keystone pipeline system running from Alberta to key U.S. refining markets, said on Thursday that supply growth out of the Western Canada Sedimentary Basin has been exceeding expectations.
South Bow is in talks with its customers to assess the commercial appetite for new projects aimed at enhancing export access, said CEO Bevin Wirzba on a conference call.
He emphasized any new project would provide modest capacity enhancements, leveraging existing South Bow infrastructure without exposing South Bow to high levels of risk.
Some Canadian politicians have suggested a new east-west pipeline could meet the Canadian oil industry’s desire for new export capacity while at the same time reducing the country’s dependence on the U.S. market.
Such a project would be a multi-billion dollar undertaking and would take years to complete, but Stauth said he believes it is necessary.
“I do think it could happen,” he said. “It’ll take will and support on behalf of governments and communities and individual Canadians.”
Canadian Natural Resources on Thursday posted a fall in fourth-quarter profit as weaker commodity prices overshadowed a rise in production.
The company said its output rose to 1.47 million barrels of oil equivalent per day (mboepd) during the fourth quarter from 1.42 mboepd a year ago.
Canadian Natural’s net income fell to C$1.14 billion ($794.76 million), or 54 Canadian cents per share, in the three months ended December 31, from C$2.63 billion, or C$1.21, a year earlier.
($1 = 1.4344 Canadian dollars)
