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Oil Stabilizes On Small Crude Draw

Kinder Morgan Warns About Trans Mountain Delays

Oil

Kinder Morgan has warned that its Trans Mountain oil pipeline expansion project is facing possibly months of delays because of the timing of permit issuance and other regulatory approvals.

The delay could be as long as nine months, Kinder Morgan’s chief executive Steven Kean said in a recent conference call, adding, however, that the company was taking steps to mitigate the effects of the lengthy approval process. Kinder Morgan still believes there is a chance for the expanded Trans Mountain pipeline to start carrying crude from December 2019 as originally planned.

The Trans Mountain project, about as controversial as every new crude oil pipeline projects in Canada and the United States, 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.

A couple of months ago, after the New Democratic Party government was sworn in, Canadian media quoted the province’s environmental minister as saying that, “Our government made it clear that a seven-fold increase in heavy oil tankers in the Vancouver harbour is not in B.C.’s best interests,” although the industry begs to differ. There have been warnings that Canada’s oil sands production will soon outgrow its pipeline capacity, causing more oil to be transported by rail—a riskier way of transportation than pipelines.

The US$5.8-billion (C$7.4 billion) project is also threatened by a legal battle in which the NDP government has partnered with First Nations. This strong opposition to Trans Mountain, one of very few new oil pipeline projects approved by the Liberal federal government, is also putting British Columbia at odds with Canada’s main oil producing province, Alberta. Production is growing and the existing pipeline network is already operating at capacity, which makes the need for new pipelines quite pressing.

By Irina Slav for Oilprice.com

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