CALGARY (660 NEWS) – Trans Mountain Corp. says the estimated cost of the expansion pipeline has risen drastically.
The project is now slated to cost up to $12.6 billion, a spike of 70 per cent.
The company expects the pipeline will be completed by 2022.
“Today, we have more than 2,900 people working on the Project and that number will grow significantly in the months ahead,” said President and CEO of Trans Mountain Corporation Ian Anderson. “With 65 per cent of the detailed route approved, and a process established by the Canada Energy Regulator for the remainder in progress, the path forward is clear. Construction is accelerating and we’re very excited to be delivering this important Project and on our commitments to Canadians, our customers and communities.”
#BREAKING Trans Mountain confirms the estimated cost of building the government owned pipeline has risen to $12.6-billion, a 70% increase. The company expects the pipeline will be completed by 2022. Trans Mountain believes the project is still commercially viable.
— Martin MacMahon (@martinmacmahon) February 7, 2020
To date, the company has spent $2.5 billion on the project, which includes the impact of delays and the additional regulatory process.
It’s anticipated an additional $8.4 billion will be spent to complete the project, plus $1.7 billion of financial carrying costs.
The estimate of $7.4 billion was made in 2017 by the previous owner, Houston-based Kinder Morgan, Inc., which sold the expansion project and the existing pipeline to the federal government in 2018 for $4.5 billion.
Opponents have attacked the greenhouse gas emission and oil spill risks of the pipeline project but they’ve also charged it will be a money-loser with unproved markets in Asia that will fail financially and leave the public holding the bag.
Anderson says the company is recommending that Ottawa, as owner and lender, set aside a further $600 million reserve for cost impacts beyond the control of Trans Mountain.
-with files from The Canadian Press