Page 8 - NorthAmOil Week 11 2023

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Cost of Trans Mountain oil pipeline

rises by further 44%

WESTERN THE estimated cost of the Trans Mountain oil original 1,150-km pipeline between Strathcona
CANADA pipeline expansion in Canada has risen by 44% County, near Edmonton in Alberta and Burnaby,
to an estimated CAD30.9bn ($22.4bn), accord- BC. It was approved in 2019 but has struggled
ing to the federally owned company developing with cost escalation and delays ever since.
the project. The expansion’s capacity is primarily commit-
Trans Mountain said it was in the process of ted to 11 shippers, comprising a mix of Canadian
securing external financing to fund the remain- and international producers and refiners. They
ing cost of the project. are contracted for 80% of the available capacity
The company cited a variety of factors driv- under long-term, take-or-pay transportation Construction of
ing the cost increase, including high global infla- contracts for 15 and 20 years, according to Trans
tion and global supply chain challenges. It also Canada’s statement. the expansion
mentioned local challenges, including unprece- The remaining 20% of the capacity on the
dented floods in British Columbia, unexpected expansion will be available through market is almost 80%
major archaeological discoveries, challenging mechanisms, it said.
terrain between Merritt and Hope, earthquake Canada’s federal government bought the complete, with
standards in the Burnaby Mountain tunnel, pipeline – beset by environmental opposition mechanical
unexpected water disposal costs in the Sumas and cost increases – from Kinder Morgan in
Prairie and issues regarding densely populated 2018 in a bid to prevent the expansion project completion
areas between Sumas and Burnaby. from being cancelled.
Construction of the expansion is almost 80% A year ago, Trans Mountain upped the anticipated to
complete, with mechanical completion antici- estimated cost of the expansion to $15.5bn,
pated to occur at the end of 2023. The pipeline an increase from $9.5bn two years earlier and occur at the end
is expected to be in service in the first quarter $5.4bn in 2017. Public funding for the project has of 2023.
of 2024. now been halted, the government announced in
Once finished, the pipeline system will February 2022.
have nearly tripled its capacity, representing an “As we committed to Canadians last year,
increase of 590,000 barrels per day (bpd) to a no additional public money will be invested in
total of 890,000 bpd. this project as construction is completed,” said
The pipeline connects the oil sands in Alberta Canada’s Finance Minister, Chrystia Freeland.
to the Pacific coast, with access to markets in the The government wants to sell the project once
US and Asia. The expansion is a twinning of the it is completed.™

P8 www. NEWSBASE .com Week 11 16•March•2023