Trans Mountain Expansion Now Expected Onstream By 2024; Project Costs Increase Again
Trans Mountain Corporation says its expansion project is close to 80 per cent complete, with mechanical completion expected to occur at the end of 2023, and the pipeline will be in-service in the first quarter of 2024.
An update last February had pegged mechanical completion of the project to occur in the third quarter of 2023.
The total project cost is now estimated to be approximately $30.9 billion, up from the previous $21.4 billion, which had been raised from $12.6 billion.
Once completed, the pipeline system will have nearly tripled its capacity, representing an increase of 590,000 bbls/d to a total of 890,000 bbls.
Trans Mountain is in the process of securing external financing to fund the remaining cost of the project. The project capacity is primarily committed to 11 shippers representing a mix of Canadian and international producers and refiners who are contracted for 80 per cent of the available capacity under long-term, take-or-pay transportation contracts for 15 and 20 years. The remaining 20 per cent of the capacity on the expanded system will be available through market mechanisms.
“Estimated costs are attributed to several factors including Trans Mountain’s commitment to ensuring project and community safety, protection of culturally significant sites for Indigenous peoples, environmental preservation, and completing a quality long-term pipeline,” said the company.
Specific factors for cost increases include high global inflation and global supply chain challenges; unprecedented floods in British Columbia; unexpected major archaeological discoveries; challenging terrain between Merritt and Hope; earthquake standards in the Burnaby Mountain tunnel; unexpected water disposal costs in the Sumas Prairie; and issues regarding densely populated areas between Sumas and Burnaby.
“Canada has among the world’s highest standards for the protection of people, the environment, and Indigenous participation when building major infrastructure projects. By including these commitments into the project design and development from the beginning, we have ensured the project will provide economic benefits to Canadians well into the future,” said Dawn Farrell, president and CEO of Trans Mountain Corporation.