Trans Mountain Alerts Regulator of Possible 2-Year Pipeline Delay

The company responsible for the Trans Mountain pipeline expansion expressed concern that the project’s completion could experience a two-year delay if the Canada Energy Regulator does not authorize a previously rejected request for a pipeline variance.

Trans Mountain Corp. stated that such a delay would be “catastrophic” for the pipeline project, which is currently over 97% complete, in a regulatory filing on Thursday. It claimed that a delay of that magnitude would cost the Crown Corporation billions of dollars in losses.

“These outcomes would not be in the public interest,” states the filing.

This situation adds to the ongoing series of difficulties faced by Trans Mountain Corp. in its efforts to complete a substantial pipeline construction project within strict deadlines.

The Trans Mountain pipeline serves as Canada’s only oil pipeline to the West Coast, and its expansion is set to enhance the pipeline’s capacity from 300,000 barrels per day to 890,000 barrels per day.

Canada’s energy industry is eagerly anticipating the project’s scheduled conclusion in early 2024, as it promises improved access to export markets.

The pipeline extension aims to mitigate the Western Canada Select differential, which reflects the discount typically applied by Canadian oil companies due to limited export infrastructure.

The project has faced construction challenges in its final stages, including route alterations near Kamloops, B.C., due to difficulty in tunnel drilling.

The recent obstacles relate to tough, hard rock conditions. Despite Trans Mountain’s request to modify pipe dimensions and coatings for a 2.3-kilometre segment, intended to simplify construction, the regulator rejected the proposal earlier this month.

Trans Mountain raised concerns that proceeding with construction in these challenging rock conditions could compromise a borehole and lead to equipment failure during drilling.

The company seeks permission once again to change the pipeline material type, citing heightened risks beyond prior assessments.

The Canada Energy Regulator, represented by spokeswoman Ruth Anne Beck, has not finalized the decision-making procedure or schedule for Trans Mountain’s recent request.

Trans Mountain urges the regulator to make a decision by January 9 to prevent unnecessary delays.

The federal government acquired the Trans Mountain pipeline in 2018 to rescue the expansion project following its abandonment by the previous owner, Kinder Morgan Canada.

Construction costs for the project have surged from an initial $5.4 billion estimate to the most recent projection of $30.9 billion.

Trans Mountain Corp. has highlighted potential losses of approximately $200 million per month if oil shipments don’t begin in early 2024 as anticipated.