Observers on the front lines of Western Canada’s oil and gas sector are looking forward to what’s widely expected to be approval of the Trans Mountain pipeline expansion on Tuesday while acknowledging the decision by Ottawa won’t solve all problems.
CEO Clayton Byrt of Pimee Well Servicing LP, a service rig company owned by six northern Alberta First Nations, says approval of the pipeline is a “big deal” because it will encourage investment by the oilsands producers he counts as customers.
He says more activity will support Pimee’s ability to retain its 140 employees — almost all Indigenous — and eventually grow the company to continue to offer good jobs to First Nations members.
The company counts Imperial Oil Ltd. and Cenovus Energy Inc. among its customers, both of whom have delayed building or completing steam-driven oilsands projects because of uncertainty about how they will get the oil to market.
Analyst Samir Kayande, a director with RS Energy Group, says the expansion to triple capacity of the existing Trans Mountain pipeline will help with market access when it comes on stream but that likely won’t happen until 2022 and could be held up by more legal challenges.
He says the pipeline isn’t big enough to fix Western Canada’s oil transportation woes on its own, nor does it address the general downturn in energy investing in North America and the lower quality of Canada’s resources compared to premier U.S. oil and gas basins.
“Even though it’s positive and it’s important, the impact on the investment climate will probably be a little bit muted at least until you can actually start construction,” said Kayande.
“It really depends on what the next round of legal challenges looks like.”
The Canadian Press