The Canada Energy Regulator is hearing arguments on Friday from Trans Mountain Corporation on why it should allow a change in the route and diameter of a small section of the pipeline. The company has warned that without that change it could face a worst-case scenario of a delay of two years in the completion of the pipeline.
The expanded Trans Mountain pipeline will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.37 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $23 billion (C$30.9 billion) and could continue to increase.
The expansion project has faced continuous delays over the years. The latest roadblock emerged in December when the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions. Trans Mountain is now waiting to receive the reasons for the decision, the corporation said, adding that construction on the project was more than 97.8% complete.
The company has asked the regulator to reconsider its decision to deny the variance request and is presenting arguments on Friday on the reasons why the request should be granted.
Trans Mountain has previously said that it plans on achieving first oil on the expanded pipeline to the Westridge Marine Terminal by the end of the first quarter of 2024.
Last week, the company said it plans to start line fill in March or May, depending on the diameter of pipe it uses and assuming there would be no other setbacks.
By Charles Kennedy for Oilprice.com
