(Calgary) The federal government said Friday it will not invest more money in the Trans Mountain pipeline expansion, despite revealing that the cost of the project jumped 70% from a previous estimate.
Updated yesterday at 4:50 PM.
Deputy Prime Minister Chrystia Freeland said Friday that Trans Mountain Corporation – the crown company that owns the pipeline – will need to secure third-party financing to complete the project, either through banks or a public debt markets intermediary.
Mrs. said.me Freeland told reporters in Ottawa, adding that the government had engaged BMO Capital Markets and TD Securities to provide financial advice on the project and both parties had confirmed that the project remained commercially viable.
M comments.me Freeland came hours after Trans Mountain announced that the projected cost of expanding the pipeline had risen significantly from its previous estimate of $12.6 billion to $21.4 billion.
The company blamed increased costs on the COVID-19 pandemic and the effects of the November floods in British Columbia, as well as project improvements, scope and alignment changes to avoid sensitive areas in the cultural and environmental plan, schedule pressures associated with licensing processes for thousands of permits, and construction challenges in marine environments and challenging terrain.
The company has also postponed the scheduled completion of the project to the third quarter of 2023. The pipeline expansion was originally expected to be completed this year.
The current Trans Mountain pipeline transports 300,000 barrels of oil per day. It is the only pipeline system to ship oil from Alberta to the West Coast.
The federal government bought it in 2018 for $4.5 billion after former owner Kinder Morgan threatened Canada to abandon the project in the face of environmental opposition.
The expansion of the pipeline would allow it to increase its daily capacity to 890,000 barrels.
Friday, m.me Freeland said the federal government still believes the Trans Mountain expansion is a “serious and necessary project.”
“This project is in the national interest and will make Canada and the Canadian economy more sovereign and resilient,” she said.
The federal government has always maintained that it does not intend to be the long-term owner of the project, a position it reiterated on Friday CE.me free land. She said the government will launch the divestment process later this year.
A number of Indigenous-led initiatives have already announced that they will seek to participate in the project.
Also on Friday, Trans Mountain Corporation announced the retirement of President and CEO Ian Anderson, effective July 1.Verse April.
“Ian has led a project that continues to move forward while setting new standards for the implementation of major pipeline projects, including unprecedented levels of participation by Indigenous people and communities,” Chairman William Downe said in a statement.
On behalf of the board of directors, we wish Ian the best just because he leaves us. »
“Subtly charming problem solver. Extreme tv enthusiast. Web scholar. Evil beer expert. Music nerd. Food junkie.”