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Summary
- Many First Nations groups have expressed their interest in purchasing Trans Mountain Corp.
- The Trudeau government bought it in 2018 after former owner Kinder Morgan failed to expand the 1,150-kilometre line.
- Some infrastructure experts have noted that even after Keystone XL’s axing, Canada may still have excess export pipeline capacity once TMX enters service.
With rival Keystone XL project’s US expansion cancelled, potential buyers of Canada’s Trans Mountain pipeline believe that its expansion plans will likely become more strategically important for the oil sector.
The Trudeau government bought Trans Mountain Corp in 2018 after former owner Kinder Morgan failed to expand the 1,150-kilometre pipeline. The pipeline ferries oil from Alberta to the coast of British Columbia. Its proximity to the Pacific Ocean, which makes shipping options to Asia and the US easier, has given its strategic importance. However, Finance Ministry spokesperson Katherine Cuplinskas has reportedly said that the government plans to sell the pipeline once it wraps up its consultations with First Nations.
Many First Nations-owned companies have expressed their interest in purchasing Trans Mountain Corp. Joe Dion, chief executive of Western Indigenous Pipeline Group, which is trying to acquire a stake in the pipeline project, said that the pipeline is now “more valuable”, though his group will not pay extra for it.
On the other hand, First Nations coalition Project Reconciliation -- another group eyeing ownership stake in the project -- said that it hopes to acquire 51 per cent of Trans Mountain Corp this year. The coalition’s executive chair Delbert Wapass said that sharing the pipeline’s profits would help out First Nations.
©Kalkine Group 2021
How Ready is the Trans Mountain Pipeline?
About 22 per cent of the Trans Mountain expansion project, aka TMX, is said to be complete and is scheduled to be up and running by December 2022. Some infrastructure experts have noted that even after Keystone XL’s axing, Canada may still have excess export pipeline capacity once TMX enters service.
Its list of committed shippers includes big names such as Suncor Energy Inc (TSX:SU), Canadian Natural Resources Ltd (TSX:CNQ) and BP PLC (LON:BP), which have procured 80 per cent of its additional capacity long-term.
Trans Mountain Corp is reportedly spending C$ 12.6 billion to increase the pipeline’s capacity by 14 per cent, or nearly three times current size, to 890,000 barrels per day (bpd).
