Trans Mountain Pipeline Change Approved, Averting Years of Delay

(Bloomberg) -- Trans Mountain Corp.’s application to use smaller pipes in a section of its pipeline expansion project was approved by Canada’s energy regulator, averting potentially “years” of delays in finishing a project that was scheduled to start this quarter. 

The application to alter the pipeline design in a section in British Columbia where the company faced challenges drilling through a mountain is subject to conditions, according to a filing on the Canada Energy Regulator website. 

The government-owned company must file a letter confirming mechanical completion of all permanent pipeline trap facilities at the north and south ends of the section seven days before the line is filled with oil, while the regulator also imposed conditions pertaining to inspections along the line.

“Having thoroughly and carefully considered all written and oral submissions received, the Commission has decided to approve the Variance, subject to the conditions imposed relating to materials and in-line inspections,” a commission of the Canada Energy Regulator said in a filing.

Trans Mountain warned in a hearing today that the project could face years of delay and billions of dollars of cost overruns if its variance application was denied. It was the second application filed for the changes, with the first being denied last month on environmental grounds. 

The expansion, which will almost triple the capacity of an existing oil pipeline running from Alberta to a shipping terminal near Vancouver, is already years behind schedule with costs that have quadrupled to almost C$31 billion ($23 billion). The line has been scheduled to start operation by the end of March. 

Prime Minister Justin Trudeau’s government bought the pipeline in 2018 to save the expansion project from cancellation amid fierce opposition in the western Canadian province of British Columbia.

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