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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Comments are closed

Just Posted

‘Justice for Mona’ protests planned in Kelowna, Lower Mainland

Security camera footage shows Mona Wang being dragged, stepped on during RCMP wellness check

Neighbourhood pond dries up again

The RDCO filled up the pond on Hall Road but it’s drying up again

Orphaned Okanagan beavers admitted to rehab centre

The two beavers are in the care of the Fawcett Family Wildlife Health Centre

Intent of killing at centre of Surrey man’s West Kelowna murder trial

B.C. Supreme Court Justice Allison Beames is anticipated to return with her decision in August

Car smashes into Kelowna dollar store

The vehicle went through the front window of the store just off Highway 97 North

13 new B.C. COVID-19 cases, Langley Lodge outbreak ends

Health care outbreaks down to four, 162 cases active

Okanagan Realtors donate big to North Westside fire department

Two Kelowna-area Realtors made a generous donation to the North Westside Fire… Continue reading

SilverStar security recovers stolen bike

Reminders to residents to keep bicycles locked up, eyes open for suspicious activity

Penticton RCMP seek help locating missing woman

25-year-old Iesha Blomquist was reported missing to Penticton RCMP on June 30

Majority of residents in support of alcohol in outdoor spaces: City of Penticton

City council will vote on whether to continue allowing public consumption, on Tuesday, July 7

Princeton RCMP arrest suspects in violent Salmon Arm home invasion

Two men who allegedly staged a violent home invasion in Salmon Arm… Continue reading

LETTER: Questions raised about Summerland solar project

Site of proposed project has been considered for previous initiatives

Alberta health minister orders review into response after noose found in hospital in 2016

A piece of rope tied into a noose was found taped to the door of an operating room at the Grande Prairie Hospital in 2016

Most Read