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Canada's Kinder Morgan warns pipeline expansion could be further delayed

 

 

By Reuters Staff

VANCOUVER/CALGARY
Petroleumworld 12 06 2017

Kinder Morgan Canada Ltd said on Monday the start-up of its Trans Mountain pipeline expansion could be delayed past September 2020 if it is unable to get more clarity around permitting and the judicial process by early next year.

The company's appeal to Canada's energy regulator over municipal permits for the C$7.4 billion ($5.8 billion) expansion was heard on Monday. The company said in a statement that it needs certainty by early 2018 to move ahead with construction.

“Unfortunately, the scope and pace of the permits and approvals received does not allow for significant additional construction to begin at this time,” Kinder Morgan Canada Chief Executive Steve Kean said in the statement.

The expansion of the pipeline from Alberta's energy heartland to a port near Vancouver would nearly triple capacity to 890,000 barrels per day.

The company had previously said that completion of the expansion could be pushed back by nine months, from December 2019 to September 2020, due to the permitting issues. It said it hoped to mitigate the delays by speeding up work in certain areas.

The unit of Houston-based Kinder Morgan Inc also said it had earmarked C$1.8 billion for spending on the project in 2018, but noted that further construction delays would lead to reduced 2018 spending. It said it planned to spend the first part of the year advancing the permitting process.

The company wants Canada's energy regulator, the National Energy Board, to resolve permitting issues with the Vancouver suburb of Burnaby and set up a process for addressing future local permit delays.

Lawyers for both sides made closing arguments on Monday before the regulator in Canada's oil capital of Calgary, Alberta. The quasi-judicial body has reserved judgment.

Maureen Killoran, representing Kinder Morgan, said Burnaby civil servants had been vague about the timelines for permit assessments and that the process had been tainted by the city's mayor, who publicly opposes it.

Burnaby lawyer Greg McDade said city officials were simply doing their jobs and treated Kinder Morgan impartially, and that any delay was caused by the company's poorly prepared applications.

Kinder Morgan has said each month of delay directly costs the company up to C$35 million and deprives it of more than C$90 million in revenue.

The company on Monday did not provide an update on the project's estimated price tag due to what it said was continued uncertainty.




Reporting by Julie Gordon in Vancouver and Ethan Lou in Calgary, Alberta; Editing by Richard Chang and Lisa Shumaker from Reuters.

reuters.com 12 05 2017

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