Trans Mountain Oil Pipeline Risks Delays If Route Change Isn't Approved

Trans Mountain Corporation (TMC) warned this week in a filing to the Canada Energy Regulator that the oil pipeline expansion project could be delayed by several months and incur additional costs if the regulator doesn’t approve a last-minute change in a small section of the route. 

The company has asked the regulator to approve a change from its approved route on a 1.3-kilometer (0.8 mile) section south of Kamloops, British Columbia, Reuters reports. The current construction method of micro-tunneling through the section is not technically or economically feasible, Trans Mountain has said. If a route change is not approved, the project could face months of delays and hundreds of millions of dollars of cost overruns, it added. 

The Trans Mountain Expansion project has been dragging on for years and faces environmental opposition and rising construction costs.

Initially, the pipeline expansion was set to help Canada export its heavy crude oil to Asia via tankers from the Canadian West Coast. But as the expansion project took years to clear permitting, financial, and construction hurdles, the global crude oil flows changed with the Russian invasion of Ukraine.

Fierce opposition in British Columbia has forced Kinder Morgan to reconsider its commitment to expand the Trans Mountain pipeline, which would increase the daily capacity of the pipeline to 890,000 barrels per day (bpd) from 300,000 bpd. So the Government of Canada reached an agreement with Kinder Morgan back in 2018 to buy the Trans Mountain Expansion Project and related pipeline and terminal assets.

Construction on the Trans Mountain Expansion Project was 94% mechanically complete with around 42 kilometers of pipe left to install as of the middle of August 2023, the company said in its Q2 results release earlier this week.

“We are currently planning and targeting the commencement of service on the expanded pipeline system near the end of the first quarter of 2024,” Trans Mountain said.  

By Charles Kennedy for Oilprice.com

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