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The construction of a stretch of the expanded Trans Mountain oil pipeline has started in British Columbia, the province whose government has been vocally opposed to the project.
The Trans Mountain company said in a statement that work had begun on a seven-kilometer section in the City of Kamloops, to continue about seven months. The company also said investment in that stretch alone will be over $450 million over the next two years.
The construction of the British Columbia stretch became possible earlier this year, when the Supreme Court dismissed an appeal by British Columbia to stop work on the expansion project. The provincial government argued the expansion will increase the risk of spills and leaks both along its route and in the waters around the port of Burnaby where the pipeline is supposed to load oil onto tankers bound for export markets. To prevent the expansion from taking place, the government decided to claim a right to dictate how much oil and gas pass through the territory of the province.
It first took its case to the British Columbia Court of Appeals, but the court rejected the case saying that the province did not have jurisdiction over the amount of oil that can pass through its territory.
The Trans Mountain pipeline currently has a capacity of 300,000 bpd of crude. After the expansion is completed, it would be able to ship 890,000 bpd of crude to the British Columbian coast.
According to the Trans Mountain company, the demand for the oil is there: it said it expected the average daily demand this year to be 316,000 bpd, up from 313,900 bpd last year. In the first quarter, however, Trans Mountain transported less than that, at 297,000 bpd, which was probably to be expected amid the oil price war that led to a slump in oil prices and the pandemic, which deepened the slump.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.