Trans Mountain oil pipeline begins filling ahead of final construction challenges
The last section of pipeline is assembled on the Trans Mountain pipeline expansion project before operations are expected to begin in the second quarter of 2024, next to the Fraser River near Laidlaw, British Columbia, Canada, February 18, 2024.
By Arathy Somasekhar
HOUSTON (Reuters) -Canada's Trans Mountain Corp has begun filling its pipeline expansion with oil in a staged process, a senior executive said on Wednesday, as construction of the long-delayed project nears an end.
The pipeline expansion faces technical challenges in the next two weeks as it finishes the last segment in British Columbia, Chief Financial Officer Mark Maki told Reuters.
"We feel good about progress," Maki said on the sidelines of the CERAWeek energy conference in Houston. "We've got some key technical things that are coming up here in the coming week or two. And once those are done, I think it should be relatively smooth sailing."
The Canadian government-owned C$34-billion ($25 billion)pipeline expansion will nearly triple the flow of crude from Alberta to Canada's Pacific Coast to 890,000 barrels per day, but has been plagued by years of delays, construction problems and cost overruns.
The pipeline, scheduled to be in service in the second quarter, is expected to raise Canadian crude prices just as producers boost production.
One of the technical challenges involves stringing pipeline through hard rock in the final segment, Maki said. Trans Mountain received approval from the Canada Energy Regulator to use smaller-diameter pipe on that segment.
Related video: Imperial Oil speaks up on pipeline shutdown impacting Winnipeg area (Global News) Duration 0:53 View on Watch
The pipeline will be highly utilized as early as next year and run full in 2025-26, Maki said.
The Canadian government has said it plans to sell the pipeline. Maki said a sale this year is unlikely.
"You've got a few uncertainties. I suspect that you know, any buyer would want to have it cleared before you would really look at a sale process," he said.
Along with completing construction, Trans Mountain is in dispute with shippers over tolls it wants to charge, a situation that the regulator is likely to resolve in early 2025, Maki said.
Bloomberg reported Suncor Energy has sold one of the first cargoes to be shipped through the expansion to China's Sinochem Group. Sinochem and Suncor did not immediately respond to requests for comment. Maki declined to comment.
($1 = 1.3576 Canadian dollars)
(Reporting by Arathy Somasekhar in Houston and Rod Nickel in Winnipeg, Manitoba; additional reporting by Florence Tan; editing by David Evans and Marguerita Choy)
No comments:
Post a Comment