Kinder Morgan warns pipeline expansion could be further delayed
VANCOUVER (Reuters) - Kinder Morgan Canada 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.FILE PHOTO -- Replacement pipe is stored near crude oil storage tanks at Kinder Morgan's Trans Mountain Pipeline terminal in Kamloops, British Columbia, Canada November 15, 2016. REUTERS/Chris Helgren/File Photo
The company, which has asked Canada’s energy regulator to help resolve disputes with a local municipality over permits for the C$7.4 billion ($5.8 billion) expansion, 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.
It said delays would affect costs, but did not provide an update on the project’s estimated price tag due to continued uncertainty.
Reporting by Julie Gordon; Editing by Richard Chang