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Kinder Morgan enters regulatory realm Formally submits application to triple capacity on Trans Mountain system to 890,000 bpd, open route for oil sands crude to Asia Gary Park For Petroleum News
Kinder Morgan has set in motion the regulatory process for plans to almost triple capacity on its Trans Mountain pipeline system, with its sights fixed primarily on delivering oil sands bitumen to Asia and confident that it can satisfy the British Columbia government’s conditions for support.
The company has filed more than 15,000 pages of application documents with Canada’s National Energy Board, seeking approval for a C$5.4 billion plan to boost capacity on Trans Mountain to 890,000 barrels per day from 300,000 bpd.
The proposal includes two lines, one with sustainable capacity of 350,000 bpd and the other with 540,000 bpd and will involve the construction of almost 600 miles of new 36-inch main pipeline.
For about 73 percent of the total route, the new pipeline segments will be directly contiguous with the existing Trans Mountain easement.
An expanded Westridge terminal in Port Metro Vancouver will be designed to handle up to 630,000 bpd and 34 Aframax class vessels per month with capacity of about 650,000 barrels each.
Ian Anderson, Kinder Morgan’s Canadian president, told a conference call his company is confident the application and regulatory process “will fully address the needs and the interests of British Columbia and the residents.”
He said the filing includes the “views, concerns and observations” Kinder Morgan gathered during meetings with First Nations, affected citizens, the public and other stakeholders including governments in British Columbia and across Canada.
BC set five conditions British Columbia Environment Minister Mary Polak would not tell reporters whether she believed Kinder Morgan has met the five conditions — primarily involving procedures to handle spills on water or land, full consultation with First Nations and direct economic benefits for British Columbia — which her government also attached to Enbridge’s Northern Gateway project.
“We’re not going to prejudge the process,” she said. “We’ll be reviewing the application and (will determine) if there is any additional information that we require in preparation for the hearings that are anticipated.”
Polak said the province is likely to apply for intervener status as it did with the Northern Gateway hearings.
The five conditions include a world-class marine spill response, full engagement of First Nations and a “fair share” of the project economic benefits for British Columbia.
Those terms were part of a contentious process that resulted in a framework agreement between Alberta and British Columbia that was announced in November, but has not yet been translated into a formal document.
NEB will set hearing schedule The NEB is now expected to develop a hearing schedule in line with new Canadian government legislation that sets a 15-month deadline on a review and decision, which requires final ratification by the federal cabinet.
If approved, the Trans Mountain expansion, covering a route of almost 700 miles from Edmonton, Alberta, is expected to be in operation by late 2017.
In the meantime, Kinder Morgan said it will continue reaching out to the public with forums and workshops to review the application and collect input and advice on the issues that are “top of mind” for parties affected by the project, Anderson said.
The ongoing engagement process with First Nations will include detailed discussions about how those communities will be affected and how the impacts can be mitigated, he said.
Anderson said that over the past 18 months Kinder Morgan, which has established a strong relationship with First Nations during earlier Trans Mountain expansions, has learned the “critical importance” of the major role First Nations must play in the project planning.
The company has had discussions with more than 100 aboriginal communities and executed 46 different agreements including memorandums of understanding and capacity funding agreements.
Anderson said none of the deals are “explicit letters of support for the project ... but we are working towards that end with virtually all of them.”
Vancouver opposition In the Greater Vancouver area opposition has been strong from environmental groups and municipal councils, notably Vancouver Mayor Gregor Robertson, where there is opposition to increased crude tanker traffic through a heavily populated area.
Anderson said Trans Mountain has safely loaded vessels for almost 60 years and is “very confident in the existing regime and existing safety standards that are in place.”
Regardless of that, he said “we support the studies by the Canadian and British Columbia governments and support the recommendations that are being made to add resources and response capability to those regimes as tanker traffic is forecast to increase.”
In its application, Kinder Morgan has recommended further improvements to marine safety and spill response, including extending tug escorts for loaded tankers through the Strait of Georgia and Juan de Fuca Strait.
Greg Stringham, vice president of oil sands and markets with the Canadian Association of Petroleum Producers, said the prospect of Trans Mountain bolstering market access beyond North America for Canadian energy is “critical to create jobs and provide economic benefits for all Canadians.”
Brenda Kenny, president of the Canadian Energy Pipeline Association, said the application is an “important milestone for the company and the industry,” but cautioned that many regulatory requirements must be resolved before a final decision can be made.
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