Americas Pipelines and MLPs: Canada Crude Pipeline Update: Higher Production Growth, but Ample New Pipeline Additions

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Americas Pipelines and MLPs: Canada Crude Pipeline Update: Higher Production Growth, but Ample New Pipeline Additions

Goldman Sachs Americas Pipelines and MLPs

growth outlook seen previously. A critical factor here is the regulatory environment,

which has improved significantly, specifically around the carbon tax framework and the

Pathways carbon storage project. In particular, the May 2026 Canada-Alberta

Implementation Agreement provided critical updates to the industrial carbon tax

framework - including a lower and slower effective carbon price trajectory of C$130 per

ton by 2040, versus the prior C$170 headline price per ton by 2030. In our view, and as

messaged consistently by the upstream producers, this should be ample to drive

production growth higher, though final resolution (notably around Pathways) being

required to drive growth to the >1 mmb/d level that has been discussed - and thus we

expect producers to wait before committing to major expansion initiatives beyond

existing upstream facilities.

Growth efforts likely focus on expanding existing assets. Against this backdrop,

producers have prioritized debottlenecking and brownfield optimization while awaiting

clarity: at our Canada Energy Symposium, SOBO pointed to an estimated ~400 kb/d of

optimization projects slated to come online by ~2028. On top of that, producers have

proposed an additional ~800-900 kb/d of larger growth projects, though many are

conditional on the improving regulatory environment - altogether bringing longer-term

incremental growth into the 1.2-1.3 mb/d range. Much of this growth is expected to

come from large public producers (Cenovus, Suncor, Imperial, and Canadian Natural)

rather than smaller operators, given their scale, balance-sheet capacity, and existing