OREANDA-NEWS. Canadian producers could lose up to $100bn over the next 15 years if no new crude pipelines are built to increase take away capacity from the oil sands in western Canada, according to a study by consulting group Wood Mackenzie.

That $100bn estimate is an unlikely, worst-case scenario, however, as some of the projects will likely move forward, said Afolabi Ogunnaike, a researcher at Wood Mackenzie.

TransCanada's Keystone XL, along with the other pipeline projects including Enbridge's Northern Gateway and Kinder Morgan's TransMountain, are even more important in a lower oil price environment because pipelines are the lowest cost transportation alternative, he said.

Moving crude by rail could cost $15-$22/bl to reach the Gulf coast while pipeline costs are 25pc-50pc lower.

The US State Department is still reviewing TransCanada's application for the 830,000 b/d Keystone XL amid strong opposition from environmental groups. The project would transport crude from Alberta's oil sands and the Bakken formation to the US midcontinent, where it would link up with an existing pipeline infrastructure feeding refineries along the US Gulf coast. Other major pipeline projects are also facing opposition.

Various companies have proposed more than $40bn of pipeline projects in Canada to move crude from the oil sands, but not all need to be developed now, according to Wood Mackenzie. "We think pipeline investments of about $15bn could really get the crude flowing," Ogunnaike said.

In a presentation in Calgary, Alberta, this week, Ogunnaike also said Canadian heavy crude will continue to displace other heavies in the US Gulf coast in the next decade and should account for about half of heavy crude imports by 2025.

Earlier this month, the Canadian Association of Petroleum Producers (CAPP) cut its outlook for production as lower prices challenge oil sands economics and force spending cuts. CAPP now expects crude production to grow from 3.7mn b/d last year to 5.3mn b/d by 2030, down by 1.1mn b/d from last year's forecast.