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Breaking News:

OPEC Lifts Production in February

Trans Mountain Pipeline Hits Yet Another Delay

The Trans Mountain expansion project may be in for yet another delay as the company in charge of it reported encountering “technical issues” during construction.

In a statement, the company said that the issues “will result in additional time to determine the safest and most prudent actions for minimizing further delay.”

The expanded pipeline was scheduled to begin operation by the end of the first quarter of this year, after a series of delays.

The Trans Mountain expansion project started as a Kinder Morgan endeavor to bring the capacity of infrastructure carrying crude from Alberta to Canada’s West coast to 890,000 barrels daily from an original 300,000 barrels daily.

Opposition from environmentalist organizations and the government of British Columbia was so fierce that Kinder Morgan at one point gave up on the project and the federal government of Canada had to buy it, spending some $$3.3 billion. After the purchase, Ottawa had to make Trans Mountain work by any means necessary, which led to additional expenses of as much as $23 billion.

The latest roadblock for the pipeline expansion project was when the Canadian energy industry regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions. On the second attempt by the Crown corporation to get the variance, the Canada Energy Regulator granted it and work continued.

The Trans Mountain corporation had warned that if the variance was not granted, the expansion project could run into a delay of up to two years on top of all the other delays so far. This probably influenced the decision of the watchdog.

Alberta oil producers are looking forward to the completion of the pipeline and already boosting production in anticipation of the sizeable additional offtake capacity. In November 2023, the oil province booked a record output of over 4 million barrels daily.

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By Charles Kennedy for Oilprice.com

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