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Kinder Morgan said it would have to delay the start of the expansion of its Trans Mountain pipeline by another three months, to December 2020, its chief executive Steve Kean said at the presentation of the company’s fourth-quarter results.
The US$5.95-billion expansion project still needs to gather all necessary permit approvals, Keane said, adding that the other reason for the delay was “because we've not completed the work necessary with our contractors to determine where we can save time and money on the build and we don't have a clear view of when the starting point is for that.”
The project aims to triple the capacity of the Trans Mountain pipeline, which carries Alberta oil sands crude to the coast of British Columbia, to as much as 890,000 bpd. Kinder Morgan has received the approval of Canada’s national Energy Board, but the pipeline expansion is being challenged by a number of groups, including environmentalists and First Nation communities located in areas along the route of the pipelines.
Trans Mountain is about as controversial as every new crude oil pipeline project in Canada and the United States, and needs more than a thousand permits before it can proceed. Kinder Morgan has already secured a few hundred of those, but it is now facing increased pressure from the new British Columbia government, which seems determined to stop the expansion whatever it takes.
This is the second delay announcement by Kinder Morgan in less than six months. Last October, Steve Kean said the launch of the expansion could take place as much as nine months after the original start date in October 2019 because of delays in the obtaining of permits.
Besides the permits, Kinder Morgan is facing several judicial reviews that would also affect the timeline of the project. In addition, the route of the expanded pipeline has not yet been finalized, and challenges could spring up there as well, according to the company’s CEO.
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.