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Will OPEC Increase Production?

Will OPEC Increase Production?

Even though the IEA cut…

Trans Mountain Oil Pipeline Faces Yet Another Delay

The Trans Mountain Expansion Project could face fresh delays after the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions.

The Canada Energy Regulator (CER) denied the variance request but said that it also considers it appropriate to take the exceptional step of issuing its decision with reasons to follow as soon as possible.

Trans Mountain Corporation, the company owned by the federal government of Canada, acknowledged it had received the letter from the regulator denying the variance request for the Mountain 3 Horizontal Directional Drill (HDD), in the Fraser Valley between Hope and Chilliwack, British Columbia.

Trans Mountain is now waiting to receive the reasons for the decision, the corporation said, adding that construction on the Trans Mountain Expansion Project is now more than 97.8% complete. 

The denial of the variance request is yet another hurdle to the completion and commissioning of the project, which has seen multiple setbacks and delays in recent years.

At the start of the project, fierce opposition in British Columbia forced Kinder Morgan to reconsider its commitment to expand the Trans Mountain pipeline that carries crude from Alberta’s oil sands to British Columbia on the Pacific Coast and which will triple the capacity of the original 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. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $22.6 billion (C$30.9 billion) and could continue to increase.

Trans Mountain has previously said that it targets to have first oil on the expanded pipeline to the Westridge Marine Terminal by the end of the first quarter of 2024. If construction is further delayed, the project could miss that deadline.

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By Tsvetana Paraskova for Oilprice.com

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