MEG Energy asks Alberta to shelve oil sands project

Canada’s MEG Energy Corp has asked Alberta Energy Regulator (AER) for a three-year delay to the approval process of a proposed oil sands project in the province, because of what it called continuing difficulties, the Globe and Mail reported.

MEG cited Alberta’s economic malaise and a lack of investors in the oil sands, as well as overloaded pipelines, in a letter late last year to the AER requesting a hold on the regulator’s approval, the report said on Monday.

MEG could not be immediately reached for comment.

Around 20 other oil sands projects are sitting on the shelf as companies delay investment decisions hoping for new pipelines and higher prices. The projects could add about 2 million barrels per day on to a market many view as already oversupplied.

Last month, Teck Resources’ decided to cancel its Frontier oil sands project due to Canada’s excessively long regulatory process.

A Canada-Alberta regulatory panel had endorsed the Frontier project last year and Prime Minister Justin Trudeau’s cabinet was scheduled to make a final decision last week before Teck pulled out.

The project needed higher oil prices, a partner and more pipelines to proceed, according to Teck.

(By Arunima Kumar; Editing by Arun Koyyur)