Canadian taxpayers may end up taking a loss of $20 billion (nearly US$15 billion) on the government-owned Trans Mountain Pipeline after costs to expand it skyrocketed, according to Morningstar.
Canadian taxpayers may end up taking a loss of $20 billion on the government-owned Trans Mountain Pipeline after costs to expand it skyrocketed, according to Morningstar Inc.
The government paid Kinder Morgan Inc. $4.5 billion for the system in 2018 after the midstream company threatened to cancel plans to nearly triple its capacity to 890,000 barrels a day. The cost of that project has soared to about $31 billion because of a range of factors including supply-chain challenges. Trans Mountain is Canada’s only oil pipeline to tidewater, moving crude from Alberta to the British Columbia coast near Vancouver.
But Trans Mountain has to compete with Enbridge Inc.’s much-larger system that carries Canadian crude into the US as far as the Gulf Coast. That will limit the tolls Trans Mountain can charge the 20 per cent of oil shippers without contracts, keeping the returns for the pipeline “very low,” Ellis said.
A number of Indigenous groups have formed to seek an ownership stake in Trans Mountain but, so far, Pembina Pipeline Corp. is the only established pipeline company to openly express interest in buying it. The expansion is 80 per cent complete and scheduled to go into operation by the first quarter of next year.
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