Work on twinning of a previous section of the Trans Mountain pipeline near Jasper. (Kinder Morgan Canada photo)

Trans Mountain pipeline cost hits $7.4 billion

Few oil shippers back out of commitments to use new line

The Trans Mountain pipeline expansion is a go commercially, according to Kinder Morgan officials, who say almost none of the oil shippers that previously committed to use the new line have opted to pull out or scale back.

Critics of the pipeline had questioned its economic justification, arguing that it had been proposed at a time of sharply higher oil prices, which collapsed over the past few years.

The final cost estimate of the project is $7.4 billion, according to Kinder Morgan, which recalculated the tolls it will charge shippers and gave them a chance to cover their share of development costs and withdraw from their commitments to use a combined 708,000 barrels per day, or 80 per cent of pipeline capacity, for 15 to 20 years.

Only three per cent of those commitments were turned back, representing a volume of 22,000 barrels per day that will be put out to market again. Kinder Morgan kept 20 per cent of the pipeline’s capacity in reserve to sell on the spot market.

“In spite of the many changes in the markets over the five years since our customers signed on, we knew commercial support for this project remained strong,” Kinder Morgan Canada president Ian Anderson said.

The latest jump in the project cost, from a previous $6.8-billion estimate, resulted from new requirements to use thicker pipe, extra drilled crossings in environmentally sensitive areas, and tunnel through Burnaby Mountain.

Kinder Morgan also reached a deal with the B.C. government in January to provide the province with up to $1 billion in payments over 20 years to go to an environment protection and enhancement fund.

There are 157 conditions on the project set by the National Energy Board and another 37 set by B.C.

Prime Minister Justin Trudeau approved the project last November, calling it good for Canada and “safe for B.C.”

Various First Nations, environmental groups and municipalities plan to challenge the project in court.

The twinning of the existing 60-year-old pipeline will nearly triple Trans Mountain’s capacity, resulting in a seven-fold increase in tanker traffic through Vancouver harbour.

Anderson said the next steps for Trans Mountain include arranging financing and making a final investment decision ahead of an expected fall construction start.

In Chilliwack, the Kinder Morgan is considering digging a trench for the pipeline through backyards to avoid drilling underground through an aquifer that the local city council wants protected.

Just Posted

High winds cause havoc for sailors

Kelowna Fire Department assists boats with sail problems on Okanagan Lake

Late night confrontation between two men in Peachland

RCMP was called to the scene of a physcial encounter on Saturday evening where one man was injured

Kelowna hotel suffers water damage

Guests at the Royal Anne Hotel in Bernard were greeted by firefighters last night

Human remains found at Silver Creek property

RCMP have been searching the property in the 2200 block of Salmon River Road for the past three days

Hodge: You can’t make this stuff up

Kelowna columnist with a story that proves in life, it’s never too late

VIDEO: Sears liquidation sales continue across B.C.

Sales are expected to continue into the New Year

Who is Curtis Sagmoen?

The Observer reveals what we know about the man attached to the Silver Creek property where human remains were found

VIDEO: Oprah Winfrey and a celebrities attend ‘B.C. Miracle Concert’

Fundraiser featured Foster, Steven Tyler, The Tenors, Matteo Bocelli, Laura Bretan, Carly Rae Jepsen

First-place Warriors edge Caps, visit ‘Backs today

West Kelowna scores twice in 25 seconds early in third to overtake Cowichan Valley in BCHL action

Grab a book; thank your librarian

All libraries are cornerstones of their communities and we celebrate them during library month

Five decades of volunteering

Even though she is approaching 70, Merle kindred continues to volunteer around the world

Twarynski trick sends Rockets past ‘Hawks

Rockets end five-game winless streak with victory Friday over Portland

Vehicle leaves scene after striking lamp post

After hitting a lamp post on Springfield Road, a vehicle has left the scene

New B.C. acute care centre opens for young patients, expectant mothers

Facility aims to make B.C. Children’s Hospital visits more comfortable

Most Read