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The Canadian federal government expects to start the sale process for the Trans Mountain oil pipeline next week with a meeting with indigenous groups interested in buying a stake, Bloomberg reported on Thursday, citing sources with knowledge of the plans.
Around 130 indigenous groups have expressed interest in buying a stake in the pipeline which carries crude from Alberta’s oil sands to British Columbia on the Pacific Coast. Representatives from the federal government and the indigenous groups are set to meet as early as next week to discuss a partial stake sale, according to Bloomberg’s sources.
The Trans Mountain pipeline is being expanded, with the aim to triple the capacity of the original pipeline that carries Alberta crude through British Columbia to the west coast of Canada—to 890,000 barrels per day (bpd) from 300,000 bpd.
At the start of the project, fierce opposition in British Columbia forced Kinder Morgan to reconsider its commitment to expand the Trans Mountain pipeline. 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.
However, the start-up of the expanded pipeline could be set back by nine months unless regulators approve a proposed change of its route.
The expansion project, expected to triple the volume of crude shipped from Canada’s oil sands to its Pacific Coast, would intensify competition for Canadian heavy crude in the Midwest, where refiners have so far received discounted crude from Canada. The expansion of the oil pipeline is expected to raise the prices U.S. refiners in the Midwest pay for Canadian oil by up to $2 per barrel, analysts have told Reuters recently.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.