After a decade of operating in the shadow of U.S. shale, Canada’s oilsands are staging a remarkable comeback. The long-awaited Trans Mountain expansion is finally online, unlocking direct access to Asian markets, tightening heavy-oil differentials, and turning Western Canada into one of the most strategic supply sources in global crude markets.
This isn’t just a temporary lift. It’s the beginning of a structural shift — one powered by a new era of market access, investor inflows, and a massive pipeline expansion cycle led by Enbridge.
Oilsands Output Hits New Highs — With More Growth Ahead
Canadian heavy oil hit a record production level in June, and the momentum is building. With Asia now able to buy barrels directly, producers are capturing higher netbacks and planning for sustainable growth through the decade.
Forecast: Oilsands output is expected to rise another 300,000–400,000 b/d, pushing the sector toward 6 million b/d by 2030.
Unlike U.S. shale, where production decline rates are steep and wells require constant drilling just to maintain volumes, oilsands facilities behave more like industrial manufacturing assets:
- Low decline rates
- High operating reliability
- Some of the lowest lifting costs in North America
That makes Western Canada a predictable, long-life supply source — exactly what refiners and investors crave in a volatile global oil market.
Investor Confidence Surges: Oilsands Stocks Outperform By Up to 3×
Capital markets have taken notice.
Shares of Suncor, Imperial, Cenovus, and MEG Energy have outperformed the S&P Global Oil Index by as much as three-fold over the past year. More telling is who is buying: U.S. institutional ownership has climbed from 40% a decade ago to 65% today.
Why?
Because while U.S. shale basins like the Permian approach plateau, Canada is the only OECD region showing reliable long-term growth backed by massive reserves and new export capability.
Investors are positioning early — and pipelines are the critical enabler.
Enbridge’s 2028 Expansion Wave: The Largest Heavy-Oil Pipeline Buildout in a Decade
Record flows on Enbridge’s Mainline — 3.1 million b/d in Q3 2025, an all-time high — are a clear signal: the system is full, demand is rising, and more capacity is needed.
Enbridge has responded with one of the largest multi-phase expansions in its history. Between now and 2028, the company is rolling out ~500 Mb/d of new takeaway across its network, with more already being engineered behind the scenes.
This is the infrastructure foundation that will support the oilsands’ next growth cycle.
1. Mainline at Capacity — And Growing
Western Canadian producers are expected to add 500–600 Mb/d of new supply by decade’s end. The Mainline — the backbone of heavy-oil flows into the U.S. — must expand to handle it.
Enbridge has already sanctioned multiple upgrades across pumping stations, terminals, and key corridors.
2. Newly Sanctioned Projects: The Next Wave of Takeaway
A. Southern Illinois Connector (2028)
100 Mb/d | 56 miles | Joint Project with Energy Transfer
This project links Wood River → Patoka and opens access to Energy Transfer’s mostly unused 470 Mb/d ETCOP system, delivering crude straight to Nederland, Texas.
Why this matters:
It transforms underutilized infrastructure into a major outlet for Canadian crude — a cost-efficient win for shippers.
B. Express–Platte Expansion (+30 Mb/d)
This raises Hardisty → Wood River capacity to 340 Mb/d, and when combined with 70 Mb/d of spare Spearhead capacity, creates a brand-new, 100 Mb/d fully contracted Alberta-to-Gulf Coast corridor for the late 2020s.
3. The Mainline Optimization Program (MLO 1 & 2)
MLO 1 (In-Service 2027)
- +150 Mb/d on the Mainline
- +100 Mb/d on Flanagan South
- Achieved via pump and terminal optimization — no new pipe required.
MLO 2 (In-Service 2028)
- +250 Mb/d more capacity
- Uses unused space on the Dakota Access Pipeline (DAPL)
- Represents a major strategic shift in North American crude logistics.
How it works:
Enbridge will build a new connection allowing up to 250 Mb/d of Canadian crude to enter DAPL in North Dakota/Saskatchewan.
Energy Transfer has confirmed Bakken output is flattening, leaving ample unused DAPL room — perfect timing for Canadian barrels to backfill.
4. The Alberta-to-Gulf Coast Mega-Corridor Becomes Reality
Once MLO 2 is active, a new continental heavy-oil superhighway is unlocked:
- Crude moves down the Enbridge Mainline
- Up to 250 Mb/d is injected into DAPL
- It flows Patoka → ETCOP → Nederland, TX
- Gulf Coast refiners receive long-term heavy-oil supply
These movements will be backed by 15-year commitments, ensuring stable flows well into the 2040s.
This corridor effectively replaces declining Bakken volumes with rising Canadian supply — a strategic realignment no one believed possible 5 years ago.
5. MLO 3 & 4 Already in Early Design
Enbridge has quietly begun planning additional expansions beyond 2028.
If U.S.–Canada energy cooperation strengthens under future policy shifts, these phases could be accelerated.
Energy Transfer has hinted that more than 250 Mb/d of Canadian flows may eventually move through DAPL.
Translation: the oilsands will have runway for growth well into the 2030s.
The Bottom Line: Market Access Is Rewiring the Future of North American Crude
Canada’s oilsands have moved from constrained to empowered — and the timing is impeccable.
Why the oilsands comeback is happening now:
- New pipelines (TMX + Enbridge’s 2028 expansions)
- Structural supply reliability vs. shale decline curves
- Global refiners seeking secure heavy barrels
- U.S. investor capital shifting north
- Gulf Coast refiners needing long-term heavy-oil feedstock
By 2028, Enbridge alone will add:
- 100 Mb/d — Express/Southern Illinois Connector
- 150 Mb/d — Mainline (MLO 1)
- 100 Mb/d — Flanagan South (MLO 1)
- 250 Mb/d — DAPL integration (MLO 2)
Total: ~500 Mb/d of new pipeline capacity supporting oilsands growth.
With more expansions already being engineered, this decade will redefine how Canadian crude moves — and how global energy markets value long-life, low-decline heavy barrels.
The oilsands aren’t just back.
They’re becoming the cornerstone of North American supply for the next 20 years.
