Trans Mountain pipeline cost hits $7.4 billion

Few oil shippers back out of commitments to use new line

File photo of twinning of a previous section of the Trans Mountain pipeline near Jasper.

File photo of twinning of a previous section of the Trans Mountain pipeline near Jasper.

The Trans Mountain pipeline expansion is a go commercially, according to Kinder Morgan officials, who say almost none of the oil shippers that previously committed to use the new line have opted to pull out or scale back.

Critics of the pipeline had questioned its economic justification, arguing that it had been proposed at a time of sharply higher oil prices, which collapsed over the past few years.

The final cost estimate of the project is $7.4 billion, according to Kinder Morgan, which recalculated the tolls it will charge shippers and gave them a chance to cover their share of development costs and withdraw from their commitments to use a combined 708,000 barrels per day, or 80 per cent of pipeline capacity, for 15 to 20 years.

RELATED: Oil pipeline construction to use cut and cover through Chilliwack residential area

Only three per cent of those commitments were turned back, representing a volume of 22,000 barrels per day that will be put out to market again. Kinder Morgan kept 20 per cent of the pipeline’s capacity in reserve to sell on the spot market.

“In spite of the many changes in the markets over the five years since our customers signed on, we knew commercial support for this project remained strong,” Kinder Morgan Canada president Ian Anderson said.

The latest jump in the project cost, from a previous $6.8-billion estimate, resulted from new requirements to use thicker pipe, extra drilled crossings in environmentally sensitive areas, and tunnel through Burnaby Mountain.

Kinder Morgan also reached a deal with the B.C. government in January to provide the province with up to $1 billion in payments over 20 years to go to an environment protection and enhancement fund.

There are 157 conditions on the project set by the National Energy Board and another 37 set by B.C.

Prime Minister Justin Trudeau approved the project last November, calling it good for Canada and “safe for B.C.”

Various First Nations, environmental groups and municipalities plan to challenge the project in court.

The twinning of the existing 60-year-old pipeline will nearly triple Trans Mountain’s capacity, resulting in a seven-fold increase in tanker traffic through Vancouver harbour.

Anderson said the next steps for Trans Mountain include arranging financing and making a final investment decision ahead of an expected fall construction start.

In Chilliwack, the Kinder Morgan is considering digging a trench for the pipeline through backyards to avoid drilling underground through an aquifer that the local city council wants protected.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Army and Navy was in business for more than a century but closed earlier this year, citing COVID-19 as the cause. The space at Langley Mall has been taken over by McFrugal’s Discount Outlet. (Lisa Farquharson/Black Press Media)
Few closures as Langley businesses battle COVID-19 downturn

Smaller, Canadian chains among casualties locally

Velma MacAllister, coordinator of the Langley Christmas Bureau, holds up donated gift cards at the bureau’s temporary location at Timms Community Centre in Langley City. The bureau is in need of cash, gift card or cheque donations this year to support 800 local families. (Joti Grewal/Langley Advance Times)
Generosity imperative this holiday season

Langley Christmas Bureau is dependent on the donation of gift cards this year

Abbotsford’s Chase Claypool celebrates with teammates after scoring a touchdown on Sunday. (Karl Roser/Pittsburgh Steelers)
Abbotsford’s Chase Claypool scores 10th touchdown

First wide receiver since 1960 to record 10 touchdowns in 10 games, Steelers still unbeaten

Fire crews dealt with a flooding home in Aldergrove last Tuesday night. (Liane Bisaillon/Special to The Star)
Aldergrove woman seeks help with flooded basement after receiving ‘lack of support’

Liane Bisaillon said she has not been able to get a hold of her property manager

People wearing face masks to help curb the spread of COVID-19 cross a street in downtown Vancouver, on Sunday, November 22, 2020. The use of masks is mandatory in indoor public and retail spaces in the province. THE CANADIAN PRESS/Darryl Dyck
B.C. reports 17 COVID deaths, 1,933 new cases as hospitalizations surge over the weekend

There are 277 people in hospital, of whom 59 are in ICU or critical care

Prime Minister Justin Trudeau speak to the media about the COVID-19 virus outside Rideau Cottage in Ottawa, Friday, Nov. 20, 2020. THE CANADIAN PRESS/Adrian Wyld
Canada’s inability to manufacture vaccines in-house will delay distribution: Trudeau

First doses of COVID-19 vaccine expected in first few months of 2021, prime minister says

Police lights
Vancouver elementary school locked down after unknown man walks into classroom

Police arrested the man and sent him for a psych evaluation

(Pixabay)
All dance studios, other indoor group fitness facilities must close amid updated COVID-19 rules

Prior announcement had said everything except spin, HIIT and hot yoga could remain open

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

B.C. Liberal interim leader Shirley Bond speaks to reporters from Prince George via Zoom conference, Nov. 24, 2020. MLAs are being sworn in for the legislature session this week, many of them also by video. (B.C. legislature)
B.C. Liberal leadership contest will wait for election post-mortem

Interim leader set to face NDP on payments for COVID-19

Tabor Home in Abbotsford. (Ben Lypka/Abbotsford News)
Tabor Home in Abbotsford records 8 deaths and 124 COVID-19 cases

63 per cent of residents at long-term-care facility have tested positive

Product Care offers more than <a href="http://link.mediaoutreach.meltwater.com/ls/click?upn=pDYyTceU0YgTDdsd92GohdQJsmSiPFEkcB4MdMM0Qkoqb1aJA-2By5aWklKJXV6QRdyTteNjr2FccUOVLUe4t5Zw-3D-3D1ds-_KVyBcpjXADXifSWVpM8nQcAzSm9-2B6fEFnjVrTsOcu31irDHDxi5k0QTOIWCqMXUxaNbrf0yRzXSSpROCkfx3NkUtbr65Dkcw1J0by-2F-2BDdDiJGbcfhtjHWYSs66NwakeCCLYkj20e9ICIZsLcedqNZKBhsN0sGgBsInpdzsddYikUZkmQvFdxLJhakpgAA6aAJ5ScUoWR6vO9sM819vRB-2F6x7dsdfIaWa4ZgHxR4G7hauxgSJCsNI2bP5J62EFfM0aiDqRPwUPUjt7i5-2FMqpdJxrEBewnLky-2B3lE0JAmi5UsJBkJejuLOjsndZz4b7dNgbvt6KyewKuF0sxU2rpYgkAO9YAKc9STuFJd28Qn7jE0-2FqlB8HKOvpW150NHS-2BOMBcK5rkZ8YAuPqJy11k-2BgndiKB-2FWl2icAfbWtRGJPb8fM-3D" target="_blank">150 free drop-off locations</a> in B.C. (Pixabay.com)
Recycling broken or burnt string lights can reduce holiday landfill waste

In 2019, Product Care Recycling diverted more than 11.6 million light bulbs from landfills

Most Read