Canadian Natural Resources Ltd has increased its volume commitment on TransCanada Corp's Keystone XL pipeline by about 46 percent to 175,000 barrels per day (bpd), Canadian Natural President Steve Laut told Reuters on Thursday.
The bigger commitment from one of Canada's largest oil and gas producers will be a boon to TransCanada, which recently held an open season to gauge interest from oil producers wanting to ship on the pipeline. The open season ended last week.
Canadian Natural is growing its oil sands operations after completing an expansion at its Horizon oil sands project in northern Alberta, which will add 80,000 bpd of production.
Keystone XL would transport crude from Alberta's oil sands to the U.S. Midwest but has been delayed for eight years by regulatory hurdles. U.S. President Donald Trump granted a presidential permit for the pipeline earlier this year, reversing a rejection by the Obama administration.
Oil prices have fallen by around 50 percent since 2014 however, prompting Canadian producers to scale back plans for production increases and fuelling speculation that TransCanada could struggle to get enough shipper demand to support Keystone XL.
TransCanada Chief Executive Russ Girling said in May that lower oil prices and alternative export routes for Canadian barrels were complicating negotiations around shipper commitments.
Bloomberg, citing sources, reported on Thursday that TransCanada had asked the government of Alberta, Canada's main crude-producing province, to buy capacity on the pipeline.
TransCanada spokesman Terry Cunha declined to comment on the Bloomberg report, saying the company does not respond to rumors, adding that it "will spend the fourth quarter reviewing the commercial support of the project."
Last month TransCanada scrapped its proposed 1.1 million bpd Energy East pipeline from Alberta to Canada's east coast amid mounting regulatory hurdles.
The Alberta government receives royalties in the form of barrels of bitumen instead of cash from some producers and had been signed up as a shipper to move 100,000 bpd on Energy East.
(Reporting by Nia Williams; Editing by Andrew Hay and Meredith Mazzilli)