Photo: Jason Franson, The canadian Press
Trans Mountain has indicated by way of a press release that its expansion project is progressing well at its terminals.
Projects such as the export terminal LNG Canada and the oil pipeline of Trans Mountain advance can be as quickly as expected, but the pandemic of COVID-19 and the sharp drop in the price of oil does not threaten their long-term profitability, said economists.
Andrew Leach, an economist for energy at the University of Alberta, said that the long-term forecasts for the oil and natural gas remain stable, even if some companies have made layoffs in order to comply with the directives of government security.
“We can all say that there will be no real impact due to the current situation, once the pandemic is passed and that the recovery will be done “, he said.
The price of oil on the world market has dropped drastically because of the excessive supply and the fact that huge reservoirs are nearly full, and as a result the refineries have slowed production to reflect the economic slowdown caused by the pandemic. The prices are so low that some canadian producers have simply stopped their activities in some regions of the country.
Werner Antweiler, an economist for energy at the University of British Columbia, indicated that the oil industry has been rocked by a “double disaster” because of the fall in global demand and the trade war between Russia and saudi Arabia. A recent agreement ratified by the member countries of the OPEC and other countries has certainly helped to reduce the production, but it is not sufficient to compensate for the fall in demand, he said.
The pipelines are faced with other challenges than those faced by the producers who fill them.
The pressure could climb on the pipeline, while canadian producers trying to get their oil to the world markets at the best possible price. The spectre of protectionism in the united states hovers over their head, and it could increase the pressure so that the canadian oil is shipped to refineries to asian, if ever, those americans are pushed out of the equation, ” said Mr. Antweiler
Trans Mountain has indicated by way of a press release that its expansion project is progressing well at its terminals, while respecting the security measures established by the governments of Alberta and British Columbia.
The current price of oil on the markets has no direct impact on the current project, has sued the company. Its customers are tied to it for 15 or 20 years, and they blink for about 80 percent of the capacity of the new pipeline. He needs to enter in function to the end of 2022, a-t-on mentioned.
In addition, the network of oil pipelines existing Trans Mountain has been exploited to its full capacity during the first quarter of 2020, added the company.
On his side, LNG Canada has conducted layoffs in order to limit the risk of the spread of the COVID-19, said the director of corporate affairs Susannah Pierce by way of a press release. However, the company and its contractor in engineering and construction, JGC Fluor JV, continue to achieve ” their objectives essential to the construction “, she assured.
Mr. Antweiler recalled that the liquefied natural gas has good prospects for the future due to the gradual transformation of the energy industry on a global scale, which becomes more and more coal to bet on natural gas, and the rising energy demand in Asia.
“These two things, they will always be there when the economy will resume as normal “, he concluded.