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Canadian Natural President says growth of oil sands is dependent on a new West Coast pipeline

The president of Canadian Natural Resources stated on Thursday that Canada's oil-sands basin has a significant expansion potential, but?its long-term growth prospects are dependent on the construction a new crude pipeline to the Pacific Coast.

Scott Stauth, the head of Canada's largest oil-and-gas producer, said this on a conference with analysts, after Canadian Natural announced that it had exceeded its first quarter profit expectations. This was largely due to higher production levels in the oil sands segment. "We need that pipeline to be able to grow oil sands in a significant way," said Stauth, referring to an Alberta government proposal ?for a new 1 million-barrel-per-day crude oil pipeline to British Columbia's northwest coast.

Canadian Natural has seen its production grow, as have other oil sands companies. The company's total output increased from 1.58 million barrels of equivalent oil per day to 1.64 millions boepd in the three-month period ended March 31.

The Jackfish?thermal sands project produced a record average of 134,396 barges per day. This was above its maximum production capacity. In April, the company reported that its facilities had also been operating above capacity. The output of all oil sands assets reached 630,000 barrels a day. Canadian oil producers want more capacity to take away the oil produced in their country. The new pipeline, which would carry 550,000 barrels per day (bpd), proposed by Canadian company South Bow with its U.S. counterpart Bridger Pipeline is intended to boost Canada's crude oil exports to the U.S. Both the Trans Mountain Pipeline (TMP) and Enbridge’s Mainline are planning capacity-enhancing projects.

PIPELINE MULTIPLY PROPOSALS

Stauth stated that Canadian Natural had long-term opportunities for growth, including an expansion of 150,000 bpd at its Jackpine Oil Sands site. This project is on hold until the company has confidence in their pipeline capacity.

Stauth added that the long-term growth of Canada is also dependent upon 'the outcome of ongoing discussions?between Canada’s federal government and Alberta. They have been trying strike a deal regarding an industrial carbon pricing policy.

Canadian Prime Minister Mark Carney has previously said a new West Coast pipeline would ?be contingent on oil sands producers constructing a massive carbon-capture-and-storage project to bring down their greenhouse gas emissions profile. Stauth did not mention that project, or any environmental goals, on Thursday.

Canadian Natural reported a?profit adjusted of C$1.17 ($0.8587) for the three-month period ending March 31. According to data compiled from LSEG, analysts on average expected profit per share of C$1.01.

Near midday, the company's stock was down nearly 4% to C$59.82 at Toronto.

(source: Reuters)