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Trans Mountain Pipeline Expansion

In the face of cratering global oil prices, concerns of oversupply and the difficulties presented by the COVID-19 pandemic, Trans Mountain’s oil pipeline expansion project reportedly continues apace. Given these recent obstacles, Trans Mountain Corporation’s statement in late April that construction on their pipeline expansion was progressing well at its terminals and along the right-of-way passage in B.C. and Alberta, could be seen as surprise by many.

The project, originally undertaken by previous owners by Kinder Morgan in 2013, also saw its original estimated completion cost of $7.4 billion balloon to $12.6 billion earlier this year.

However, Trans Mountain still remains bullish about the prospects. The company does not believe that current oil prices will have a direct impact on the project and they point to 15 and 20 year commitments already in hand from customers. These will reportedly account for roughly 80% of the capacity of the expanded pipeline.

The existing pipeline (which runs from the oil fields in Alberta to the Port of Vancouver), operated at its maximum capacity for the first quarter of 2020 and will see its capacity jump from 300,000 barrels per day up to almost 900,000 barrels per day, once the twinning is complete.

For the Port of Vancouver, this will mean an increase in oil tanker traffic from the current average of about 5 oil tankers a month (approximately 2% of total ship traffic) up to about 34 tankers per month (or 14% of total ship traffic), once the new pipeline is up and running. In preparation for thus substantial increase in vessel traffic, the Port and the Pacific Pilotage Authority have already been working on plans to minimize the effect this will have on all other stake holders in the port. What exactly this will translate to for anchorage and pilot availability though remains to be seen.

Major components of the Trans Mountain expanded pipeline:

  • Approximately 980 km of new pipeline
  • Approximately 193 km of reactivated pipeline
  • Twelve new pump stations
  • Nineteen new tanks will be added to the existing storage terminals in Burnaby (14), Sumas (1) and Edmonton (4)
  • Three new vessel berths at Westridge Marine Terminal in Burnaby
  • The existing pipeline will carry refined products, synthetic crude oils, and light crude oils with the capability for heavy crude oils
  • The new pipeline will carry heavier oils with the capability for transporting light crude oils

The twinned pipeline is currently expected to come into service by the end of 2022 or early 2023.