Trans-Mountain Pipeline Clears Final Hurdle for Expansion
01/11/17 08:45 PM EST
By Paul Vieira
The Canadian province of British Columbia said Wednesday Kinder Morgan Inc. could proceed with plans to expand its Trans Mountain crude-oil pipeline, representing the final regulatory hurdle for the multibillion-dollar project.
Kinder Morgan’s plan, which received federal government approval in late November, would triple capacity to 890,000 barrels of crude oil a day on the existing 714-mile pipeline that carries crude oil from Alberta to British Columbia’s Pacific coast. The total cost of the project is an estimated 5.5 billion Canadian dollars ($4.17 billion).
The project would increase Canadian crude exports to Asia and reduce its dependence on the U.S. market, where Canada’s oil sells at a substantial discount to global prices. Kinder Morgan plans to increase ship loads of crude oil to foreign markets, including China, to 34 ships a month from five now.
Canadian Prime Minister Justin Trudeau gave his approval to the project in November as part of a compromise on pipeline development that included blocking the more controversial Northern Gateway pipeline proposed by Enbridge Inc.
Kinder Morgan said the British Columbia’s approval means it has met the province’s five pre-existing conditions, which cover matters related to the environment, aboriginal communities and economic benefits. The province had the power to block the project, despite the federal support.
British Columbia’s decision to approve the Kinder Morgan expansion “represents a positive outcome for our company, customers and for British Columbians and all Canadians who will benefit from the construction and operation of an expanded pipeline,” said Ian Anderson, president of Kinder Morgan’s Canadian unit.
Kinder Morgan said the project still requires final approval from Kinder Morgan’s board of directors. Construction could begin in September 2017, with an in-service date for the expanded pipeline system in late 2019, the company added.
Kinder Morgan has also agreed to pay up to C$50 million a year to a provincial fund that can be tapped by cities and towns in the process for environmental protection if crude shipments exceed certain volumes.
The British Columbia government said its approval comes with an additional 37 conditions, on top of the 157 conditions federal authorities have mandated, ranging from having strategies in place to protect the grizzly bear population to assurances Kinder Morgan will offset carbon emissions the project creates.
“Clearly, the project will have economic benefits for British Columbia workers, families and communities. However, we have always been clear economic development will not come at the expense of the environment,” the British Columbia government said in a statement.
Write to Paul Vieira at email@example.com
(END) Dow Jones Newswires
January 11, 2017 20:45 ET (01:45 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.