Since receiving Government of Canada approval, Trans Mountain has been moving forward with the regulatory, commercial and construction planning aspects of its Expansion Project and has made significant positive progress.

The Expansion Project came about in response to requests from oil shippers to help them reach new markets by expanding the capacity of North America’s only pipeline with access to the West Coast. In 2012, thirteen shippers made 15 and 20-year commitments of 708,000 barrels per day or roughly 80 percent of the capacity of the expanded pipeline, with the other 20 percent reserved for spot volumes consistent with National Energy Board (NEB) direction.

Following Federal approval, and consistent with its agreements with firm shippers, Trans Mountain delivered a final cost estimate and revised tolls to its shippers. Shippers had the option to keep their volume commitments or turn them back and pay their share of development costs incurred to date. Since receiving the final cost estimate and revised tolls, some existing and prospective shippers have picked up capacity from other shippers. The net result of that process is the turn back of only 22,000 barrels per day or 3 percent of the previously committed barrels. Those barrels will be made available, on the same terms as existing commitments, to the market in an open season that will begin on March 9th. An open season is a commonly used commercial process allowing customers to secure space on the pipeline. In this open season, the only space available will be the 22,000 barrels per day of capacity turned back, as the remaining 97 percent of the firm volumes are under contract with existing or new shippers.

Kinder Morgan’s final cost estimate and increased tolls reflect the updated project cost of $7.4 Billion CAD. The higher project cost can be attributed to a number of factors including costs associated with the National Energy Board’s (NEB) 157 Conditions and Project changes as a result of public feedback such as thicker pipe wall, additional drilled crossings in environmentally sensitive areas and the Burnaby Mountain tunnel.

“It’s been a lengthy and rigorous process and 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,” said Ian Anderson, President of Kinder Morgan Canada.

“Over the past five years, we’ve listened to Canadians and made changes to the Project that have increased costs, but made our Project better,” added Anderson. “We’re proud of the Project we’ve developed and how it reflects the values and priorities of our communities and we’re pleased our customers have re-confirmed their support and interest in its purpose of delivering much needed west-coast access for their products.”

Next steps for the Project include arranging acceptable financing and a final investment decision by Kinder Morgan. Construction is set to begin in Fall 2017 and the Project is expecting an in-service date of late 2019.