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

Langley letter writer hopes after seeing how Willoughby developed, the Township protects Walnut Grove green spaces. (Langley Advance Times file)
LETTER: Walnut Grove resident cherishes Langley’s green spaces

Willoughby was allowed to develop without enough consideration for nature, writer says

Motorists breaking travel rules can be fined $230 for failing to follow instructions or $575 if the reason for travel violates the essential travel health order, at this Highway 3 check area near Manning Park. Photo RCMP
RCMP begin stopping drivers on BC highways – checkpoint at Manning Park

Four checkpoints are set up Thursday, May 6 around the province

The Aquilini Investment Group has agreed to a proposed contract of five years to run the Abbotsford Centre. (File photo)
Proposal to run Abbotsford Centre offered to Canucks ownership group

Planned five-year contract to cost city $750K annually, starting Jan. 1, 2022

Former Langley School District superintendent Suzanne Hoffman is the new CEO of the B.C. School Trustee Association (BCSTA). (Black Press Media files)
Former Langley school superintendent to lead trustee organization

Suzanne Hoffman worked for Langley before a job with Vancouver School Board

Integrated Homicide Investigation Team Sgt. Frank Jang said outside of Langley Sportsplex at 91a Ave and 200 Street after a man was fatally shot in April 2021. (Black Press Media file)
LETTER: Casual drug users have link to gang killings, says Langley letter writer

The Lower Mainland is in the midst of another gang war and the illicit drug market is part of it

Protesters attempt to stop clear-cutting of old-growth trees in Fairy Creek near Port Renfrew. (Will O’Connell photo)
VIDEO: Workers, activists clash at site of Vancouver Island logging operation

Forest license holders asking for independent investigation into incident

A worker rides a bike at a B.C. Hydro substation in Vancouver, on Friday, April 16, 2021. THE CANADIAN PRESS/Darryl Dyck
BC Hydro report raises safety concerns as pandemic prompts jump in yard work

Incidents involving weekend tree trimmers, gardeners and landscapers have risen 30% since the pandemic hit

Surrey RCMP is investigating after a serious three-vehicle crash at the intersection of King George Boulevard and 128th Street Thursday afternoon (May 6, 2021). (Photo: Shane MacKichan)
VIDEO: Serious crash in Surrey sends 1 to hospital

Surrey RCMP say one of the drivers fled on foot, but was later found at an area hospital

Starting Tuesday, May 11, B.C. adults born in 1981 and earlier will be able to register for a vaccine dose. (Haley Ritchie/Black Press Media)
BC adults 40+ eligible to book COVID-19 vaccinations next week

Starting Tuesday, people born in 1981 and earlier will be able to schedule their inoculation against the virus

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

John Paul Fraser, executive director of the BC Salmon Farmers Association. (Screen shot)
Salmon farmers warn Surrey jobs on line as feds end Discovery Islands operations

344 full-time jobs at risk in Surrey and 1,189 B.C.-wide

Parks Canada and Tla-o-qui-aht Tribal Parks dig the washed up Princess M out from sand along the south shore of the Pacific Rim National Park Reserve. (Nora O’Malley photo)
Rescue attempt costs man his boat off Pacific Rim National Park Reserve

Coast Guard response questioned after volunteer responder’s speedboat capsizes in heavy swells

Al Kowalko shows off the province’s first electric school bus, running kids to three elementary and two secondary schools on the West Shore. (Zoe Ducklow/News Staff)
B.C.’s first electric school bus making the rounds in Victoria suburbs

No emissions, no fuel costs and less maintenance will offset the $750K upfront expense

Road sign on Highway 1 west of Hope warns drivers of COVID-19 essential travel road checks on the highways into the B.C. Interior. (Jessica Peters/Chilliwack Progress)
B.C. residents want travel checks at Alberta border, MLA says

Police road checks in place at highways out of Vancouver area

Most Read