Trans Mountain Pipeline Expansion Faces Further Delays, Potential Billions in Losses

The Canadian government-owned Trans Mountain Corp has raised concerns over the completion timeline and potential financial losses associated with the nationalization of the Trans Mountain Pipeline expansion. Despite being 95% complete, a rejection by the Canada Energy Regulator (CER) to proposed construction changes could result in a two-year setback and billions of dollars in losses.

Trans Mountain Corp has formally requested the CER to reconsider its decision to reject proposed construction changes on the oil pipeline expansion. The company warned of a “catastrophic” delay and substantial financial repercussions if the request is not approved promptly.

The rejected proposal involved a variance for a 1.4-mile (2.3-km) section of the pipeline under construction in British Columbia. Trans Mountain sought permission to use a smaller diameter pipe in response to challenging drilling conditions caused by the hardness of the rock in a mountainous area between Hope and Chilliwack.

In a letter to the CER, Trans Mountain emphasized that complications could arise if the currently approved construction plan proceeds, potentially compromising a borehole for the pipeline. The company argued that the hard rock conditions and fractured areas within the bedrock have led to high rates of water ingress, causing further complications.

“If the (horizontal directional drill) fails and Trans Mountain is required to implement an alternative installation plan, the Trans Mountain Expansion Project (TMEP) schedule will likely be delayed by approximately two years, and Trans Mountain will suffer billions of dollars in losses,” warned the company in its letter.

Trans Mountain has requested a prompt decision from the CER by January 9 to adhere to its existing schedule. The expansion, originally budgeted at $30.9 billion, has faced numerous setbacks and delays. The recent rejection by the CER adds to the challenges, potentially jeopardizing the project’s completion by the end of March 2024.

Stifel analyst Michael Dunn noted that given the new information provided by Trans Mountain, the CER is likely to approve its request. The expansion project, intended to triple crude shipments from Alberta to Canada’s Pacific coast, is currently 97% complete.

Concerns about delays have led to an increased discount on Canadian heavy crude compared to the North American benchmark. Oil producers, anticipating expanded options for exporting oil to refineries in California and Asia, have heightened output.


Information for this briefing was found via Reuters, City News, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Why This Gold Run Isn’t Over Yet! | Scott Hicks – Prime Mining

This Gold Market Is Fueling Big Swings | Rory Quinn – Yukon Metals Corp

Why Silver Lags Even at $41 | Dan Dickson – Endeavor Silver Corp

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

Oil Companies Are Just Waiting for Trudeau to Get Kicked Out

The general election isn’t until October 2025, but some oil and gas producers are already...

Wednesday, December 20, 2023, 03:10:00 PM

Trudeau Government Makes Last-Minute Appointments as Leadership Change Looms

Just days before the Liberal Party selects a new leader, Prime Minister Justin Trudeau’s cabinet...

Friday, March 7, 2025, 11:21:00 AM

Trudeau Clarifies Cocaine License “Not Permission To Sell Commercially” As Second BC Firm Secures License

Langley-based Adastra Holdings (CSE: XTRX) has walked back its original statement regarding its announcement of...

Friday, March 3, 2023, 08:50:18 PM

Trudeau Unveils GST Holiday: Economic Relief or Political Stunt?

Prime Minister Justin Trudeau unveiled a temporary two-month GST holiday and direct cash payments as...

Friday, November 22, 2024, 07:37:12 AM

Trudeau Defends Allowing Non-Citizens to Vote in Liberal Nomination Races

A recent post expressed concern over Prime Minister Justin Trudeau defending the rules allowing non-citizens,...

Thursday, October 17, 2024, 09:48:00 AM