Trans Mountain Pipeline and the Expansion Project Have Continued Safely Through the Global Pandemic

Trans Mountain Corporation (TMC) today posted its financial statements and associated management report for the three month period ending March 31, 2020. The company’s financial results were also included in Canada Development Investment Corporation’s consolidated quarterly financial statements. 

For the quarter ended March 31, 2020, net income increased by $12.8 million and totaled $25.2 million, as compared to $12.4 million in the same period of the prior year. The increase is mainly due to the $16.4 million increase in equity AFUDC (Allowance for Funds Used During Construction)  and a $4.3 million decrease in interest expense due to increase capitalized interest, both due to increased capital spending on the TMEP (Trans Mountain Expansion Project).

Average daily throughput on the mainline for the quarter averaged approximately 297,000 barrels per day, throughput to Washington State on the Puget pipeline averaged approximately 191,000 barrels per day, and Westridge Marine Terminal averaged 52,000 barrels per day during the period.

“Trans Mountain has implemented industry-leading measures to ensure we continue safely operating the pipeline and constructing the Expansion Project during these unprecedented times. Ensuring the safety of our workforce and communities is our first priority, and to date we have had no cases of COVID-19 in our workforce” said Ian Anderson, President and CEO of Trans Mountain Corporation. “While the situation remains dynamic we have been taking direction from the health authorities and have implemented the highest standards of health and safety in order to continue construction on the Expansion while ensuring that the vital transportation of petroleum products to B.C. and Washington State, and  world markets for Alberta’s producers.”

In the first part of 2020, work continued at the Lower Mainland terminals with considerable progress made on the foreshore expansion at the Westridge Marine Terminal and ongoing work to prepare for installation of tanks at Burnaby Terminal. In Alberta, work is underway in various phases of construction with pipe in the ground in the Yellowhead region and Greater Edmonton area as well as work in Jasper National Park. 

“While COVID-19 presents challenges for our industry and our communities, we are optimistic that we will be able to continue delivering positive results, both operationally and financially,” added Anderson. “To date, the pipeline has continued to be full, and together with our contractors, we remain committed to providing safe work and employment opportunities.”

In February, the Federal Court of Appeal dismissed challenges to the Federal Government’s approval of the TMEP. During the quarter, TMC also announced a revised cost estimate for the Expansion Project of $12.6 billion with service expected to start by the end of 2022. TMC’s projected Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and equity AFUDC) is expected to be at least $1.5 billion in the first year of operation of the Expansion and expected to grow annually. These projections are underpinned by long-term contractual commitments covering 80% of the system’s 890,000 barrels a day of capacity.

See the full financial statements and management report documents here

See Canada Development Investment Corporation’s Quarterly Report here.

Non-GAAP measures

We make use of certain financial measures that do not have a standardized meaning under U.S. GAAP because we believe they improve management’s ability to evaluate our operating performance and compare results between periods. These are known as non-GAAP measures and may not be similar to measures provided by other entities. Adjusted EBITDA is a non-GAAP measure we use to evaluate our operating performance absent the impact of financing decisions, non-cash depreciation and amortization, and non-cash equity AFUDC.

AFUDC is an amount recognized by rate-regulated entities to reflect a return on the equity and debt components of capital invested in construction work in progress.