Trans Mountain oil pipeline plan gets bigger yet

Kinder Morgan Canada now plans to boost its proposed expansion of the Trans Mountain pipeline from 750,000 to 890,000 barrels per day, bringing more oil tankers to Vancouver harbour than previously announced.

The nearly 20 per cent increase in the planned capacity pushes the cost of the project up to $5.4 billion from $4.1 billion.

The company previously estimated the project would bring a five-fold increase in the number of tankers to about 25 a month or about 300 per year loading at its Burnaby terminal.

Company president Ian Anderson said he now expects up to 34 tankers per month ? potentially around 400 per year.

The larger project reflects the recent signing of more long-term contracts with shippers, bringing the total committed volume on the twinned line to 700,000 barrels per day.

The remaining pipeline capacity would be sold on the spot market and Anderson anticipated that will be enough to supply existing customers, such as the Chevron refinery in Burnaby and other refineries in Washington State.

He framed the increased demand for the pipeline as a strong statement of support from the markets and Canadian oil companies, who are increasingly forced to sell oil at a discount because of the lack of pipeline capacity to get it to international markets.

"We are very, very pleased with the response from our customers," Anderson said.

Asked if a further increase in Trans Mountain's capacity could be proposed to meet even more oil company demand ??perhaps if Enbridge withdrew its Northern Gateway pipeline proposal ??Anderson did not rule the possibility out.

"It could," he said. "But I can't speculate on what our plans or design potential might be at that stage. This is the project we're designing for right now."

He said he's hearing growing "concern and angst" from oil producers about their ability to access markets.

"We are seeing more and more support and interest in our project," Anderson said. "I wouldn't say I could connect that interest directly with Northern Gateway's prospects."

Enbridge's project would run across northern B.C. to Kitimat, extending oil pipeline over new ground and hundreds of salmon rivers, while Kinder Morgan's would largely follow the existing 60-year-old pipeline's 1,150-kilometre right-of-way from northern Alberta through Kamloops to the Lower Mainland.

Anderson said the bigger Trans Mountain capacity will require a larger pipe size ??36-inch diameter instead of 30 inch ??in areas such as the Lower Mainland.

Kinder Morgan expects to file its formal application to build the pipeline with the National Energy Board by the end of the year.

If approved, the expanded Trans Mountain pipeline could be operational late in 2017.

The company conducted initial public information sessions last year but much more is promised.

"One of the greatest challenges is to demonstrate and convince the public that tanker traffic through Port Metro Vancouver can continue to be done in a safe manner," Anderson said.

"We'll be dedicating a lot of attention to that, as we have been doing already."

The provincial government has said Kinder Morgan's project will have to meet the same preconditions B.C. has set for Enbridge to proceed, including world-class safety standards and a share of benefits.

"We're confident we can design and execute on a project that can meet parties' concerns," Anderson said.

Kinder Morgan officials say they've already been preparing for further study ordered by U.S. authorities into Canadian tanker traffic near Washington State.

Thirteen firms have now signed long-term contracts of 15 to 20 years. They are BP Canada Energy Trading, Canadian Natural Resources, Canadian Oil Sands, Cenovus Energy, Devon Canada, Husky Energy, Imperial Oil, Nexen, Statoil, Suncor Energy Marketing, Suncor Energy Products Partnership, Tesoro Refining & Marketing and Total E&P Canada.

Christianne Wilhelmson of the Georgia Strait Alliance said Kinder Morgan may see support among its industry partners but predicts solid opposition among B.C. residents.

"There is no common ground," Wilhelmson said, adding the company is focused on getting oil out to market that environmental groups want kept in the ground.

"This announcement just underscores that whatever they say about consultation, whatever they say about discussion, their construct cannot take into consideration our concerns. They don't view risks the same way. The company does not value what we value."

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Source: http://www.burnabynewsleader.com/news/186354571.html

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