Oil shippers demand explanation from Trans Mountain for massive pipeline cost overruns

globalnews.ca:

A group of oil shippers is asking the Canada Energy Regulator to compel the company behind the Trans Mountain pipeline expansion to provide them with a full and detailed breakdown of the project’s escalating construction costs.

The shippers — which includes Canadian Natural Resources Ltd., Suncor Energy Inc.,, Cenovus Energy Inc., PetroChina Canada Ltd. and Marathon Petroleum Canada — are seeking an order from the regulator requiring Trans Mountain Corp. to provide more information about why the project’s costs have ballooned to more than $30 billion from a 2017 estimate of $7.4 billion.

“The stakes are high: billions of dollars at issue, with Trans Mountain’s (costs) having more than quintupled since 2017 — and its costs are still growing by billions, seemingly unchecked,” the oil companies stated in a motion filed with the Canada Energy Regulator earlier this week.

“Yet Trans Mountain refused to answer most of participating shippers’ (request for information) and inappropriately dismissed most requests as irrelevant ‘fishing expeditions.'”

The Trans Mountain pipeline, which was bought by the federal government in 2018, is Canada’s only oil pipeline to the West Coast.

Its nearly complete expansion project will increase the pipeline’s capacity by 590,000 barrels per day to a total of 890,000 barrels per day, improving access to export markets for Canadian oil companies.

But Trans Mountain Corp. and its oil company customers are currently engaged in a dispute over tolls, the term for the fees the pipeline company will charge to ship oil on the expanded pipeline.

In its most recent update provided last month, Trans Mountain said it now has reason to believe the costs of the project will come in approximately $3.1 billion