Kinder Morgan has fallen short of expectations of shipper backing for its planned expansion of the Trans Mountain pipeline from the Alberta oil sands to the Pacific Coast, forcing the company to scale back its proposed volumes.
As a result the project volumes have been sharply reduced to 450,000 barrels per day from 550,000 bpd, lowering the estimated cost to C$4.1 billion from C$5 billion.
There was a shortfall in the number of shippers signing on to 20-year contracts to support the massive expansion of the existing 300,000 bpd Trans Mountain system.
Head-to-head with Northern Gateway
The Trans Mountain plan is going head-to-head with Enbridge’s 525,000 bpd Northern Gateway venture, but both face fierce opposition from environmental groups and First Nations, with Kinder Morgan also colliding with municipal governments in the Greater Vancouver area who want no part of increased tanker traffic in the Port of Vancouver.
However, a spokesman for Kinder Morgan said his company remains in talks with City of Vancouver officials in hopes of overcoming some of the concerns.
“We’re developing our consultation and engagement program and that’s set to roll out later this summer,” he said.
Kinder Morgan hopes to file regulatory applications by late 2013 and start shipments to Asia by 2017.
The existing Trans Mountain pipeline is routinely overbooked by producers seeking access to British Columbia and Washington state refineries. For June, shippers have been restricted to 32 percent of their hoped-for volumes.
—Gary Park
