A controversial pipeline expansion that’s set to boost Canada’s oil shipments to the Pacific Coast is facing the prospect of a costly delay just months before its scheduled startup.
(Bloomberg) — A controversial pipeline expansion that’s set to boost Canada’s oil shipments to the Pacific Coast is facing the prospect of a costly delay just months before its scheduled startup.
Trans Mountain is seeking a route change after running into engineering challenges while drilling a tunnel in British Columbia, according to an Aug. 10 letter filed with the Canada Energy Regulator. The change faces opposition from an indigenous group, and if isn’t approved, the pipeline’s start date will be pushed back and its cost will “significantly increase” beyond initial estimates, government-owned Trans Mountain said in the filing.
The new challenges add to repeated delays and cost overruns that have dogged the project since it began more than a decade ago. All of that compromises the expansion that promises to move as much as 890,000 barrels a day of land-locked Alberta oil for waterborne exports near Vancouver, a boon for the Canadian economy — or so the government said when it bought the project from Kinder Morgan in 2018. The project’s cost has more than quadrupled to C$30.9 billion ($22.8 billion).
The latest complication involves a route change of roughly 1.3 kilometers (0.8 miles) of pipeline that lies in the traditional territory of the local Stk’emlúpsemc te Secwépemc Nation, or SSN. The tunneling was a modification made to accommodate SSN’s concerns, and the local community wants to stick with it, according to an Aug. 4 SSN letter to Trans Mountain.
Trans Mountain didn’t respond to an email request for comment, and SSN didn’t respond to similar requests via email and phone.
The route change is also happening as Trans Mountain negotiates shipping tolls. Canadian Natural Resources Ltd., along with several other companies that have signed contracts to use the line, requested a two-week extension on a deadline to provide comments on tolls. The altered route may have “implications” on timing of commencement date for the line, Canadian Natural said.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.