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Line fill on the long-delayed Trans Mountain pipeline expansion will start from April, MEG Energy (OTCPK:MEGEF) CEO Derek Evans said Friday, referring to the final step before the expanded Alberta-to-British Columbia oil pipeline begins service.
The government-owned pipeline operator has called for 2.1M barrels in April and another 2.1M in May, Evans said on MEG Energy’s (OTCPK:MEGEF) post-earnings conference call.
“We see this as incredibly positive – good news for not only us, but everybody in the heavy oil business. That incremental egress will substantially reduce that [heavy crude] differential,” Evans said.
Heavy crude producer MEG (OTCPK:MEGEF) is a committed shipper on the Trans Mountain Expansion and plans to move 20K bbl/day on the line.
The expansion will transport an extra 590K bbl/day, tripling the pipeline’s existing shipping capacity to Canada’s Pacific Coast once the C$30.9B project comes in service, expected in Q2.
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Evans also said MEG (OTCPK:MEGEF) expects to reach its C$600M net debt target in this year’s Q3, and is considering a “relatively small” base dividend.