March 9 Shipper commitment for Kinder Morgan
Inc's Canadian Trans Mountain pipeline expansion project
dipped by 3 percent, or 22,000 barrels per day, after the
company raised its cost estimate to C$7.4 billion ($5.48
billion) and increased tolls, the company said on Thursday.
The current Trans Mountain pipeline between the
oil-producing province of Alberta and the west coast is
routinely oversubscribed, and the expansion has had strong
support from Canadian oil sands shippers.
But it also faces strong opposition from environmentalists
and communities along its route, with critics from First Nations
chiefs to the mayor of Burnaby, where it terminates, vowing
civil disobedience to disrupt construction.
In a statement, Kinder Morgan said the tolls increased in
part because of conditions imposed by the National Energy Board
regulator and project changes as a result of public feedback
such as thicker pipe walls.
It did not say how much the tolls rose, but it said last
month the project's cost was then estimated at C$6.8 billion.
The 3 percent of capacity that was turned back will be
offered to the industry again starting Thursday via an "open
season" process, the company said.
In November the Canadian government approved Kinder Morgan's
plan to nearly triple its crude pipeline to 890,000 barrels per
Since receiving the final cost estimate and revised tolls,
some existing and prospective shippers traded capacity among
themselves, resulting in the 3 percent drop, the company said.
The remaining 97 percent of Trans Mountain capacity are
under contract with existing or new shippers, and the company
maintains "strong" commercial support for the project, Kinder
The biggest U.S. pipeline company said next steps for the
project include arranging financing and a final investment
People familiar with the process told Reuters last month
that Kinder Morgan had begun talks with institutional investors
including major Canadian pension funds and private equity firms.
($1 = 1.3511 Canadian dollars)
(Reporting by Ethan Lou in Calgary, Alberta, and Swati Verma in
Bengaluru; Editing by Chizu Nomiyama and Andrew Hay)