Name and Location
Trans Mountain pipeline expansion project, Canada.

Client
Kinder Morgan.

Project Description
The original Trans Mountain pipeline was built in 1953 and continues to operate. The project proposes a 980 km expansion of this 1 150 km pipeline between Strathcona County (near Edmonton), Alberta and Burnaby, British Columbia. The expansion, if approved, will create a twinned pipeline that will increase the nominal capacity of the system from 300 000 bbl/d to 890 000 bbl/d.

The existing line will carry refined products and synthetic and light crude oils, with capability to carry heavy crude oils as well.

About 73% of the proposed route will use the existing right of way, 16% will follow other linear infrastructure, such as TELUS, hydro or highways, and 11% will be new right-of-way infrastructure.

The project includes the reactivation of 193 km of pipeline; the construction of 12 new pumpstations; the addition of 20 new tanks to the existing storage terminals in Burnaby (14), Sumas (1) and Edmonton (5); and the expansion of the Westridge marine terminal by three berths.

Value
The project is expected to cost about $5.4-billion.

Duration
The project is expected to begin construction this year and brought into service in 2019.

Latest Developments
The new Pipeline Safety Act has come into force in Canada, heralding a new era of absolute liability for pipeline owners and operators, and setting out financial resource requirements to pay for all costs related to a spill or rupture.

The National Energy Board (NEB) has welcomed the Act, which first received Royal Assent on June 18, 2015. This also resulted in changes to the NEB Act and, to some extent, the Canada Oil and Gas Operations Act.

“These legislative changes enhance and strengthen our mandate to provide life-cycle oversight of federally-regulated pipelines, from construction to abandonment,” NEB chairperson Peter Watson has stated.

According to the NEB, the most significant changes to the Pipeline Safety Act (Bill C-46) relate to absolute liability and financial resource requirements, abandonment, pipeline releases, damage prevention, as well as audit and enforcement powers. The absolute liability provisions in the Act apply to the company that owns the pipeline, not landowners or other companies such as incorporated farms. The NEB states that it will hold the company that owns the pipeline, and not farmers or other parties, responsible for any clean-up costs in the event of a spill or rupture.

The Pipeline Safety Act provides improved provisions for damage prevention, which lays out obligations for those planning the construction of facilities, ground disturbance activities or vehicle or mobile equipment crossings in the area of an NEB-regulated pipeline, as well as the obligations of pipeline companies.

Further, the NEB’s jurisdiction has also been expanded to provide oversight of pipelines post-abandonment. Companies will remain liable for post-abandonment costs and damages. It also provides the NEB with new powers for inspection officers, and new authority to assume control of an abandoned pipeline if a company is not complying with a NEB order.

Under the new regulations, the Governor in Council has the authority, in the event of a pipeline release, to ‘designate’ a company if it either did not have the ability to pay for the release or did not comply with a board order, and for the NEB to take over spill response.

The Act has further instituted new measures to help ensure that pipeline companies hold enough financial resources to pay these types of costs in the event of a spill or rupture.

NEB-regulated companies operating pipelines that have the capacity to transport at least 250 000 bbl/d of oil will from now on be liable for all costs and damages for an unintended release of up to C$1-billion, regardless of fault.

Currently, five companies will be subject to the C$1-billion absolute liability, including Enbridge Pipelines, Enbridge Pipelines (Westspur), Express Pipeline, TransCanada Keystone Pipeline and Trans Mountain Pipeline. Other projects that would fall under the new liability regulations, should they be approved, include TransCanada's Energy East pipeline project and Kinder Morgan's Trans Mountain pipeline expansion project.

Meanwhile, a First Nation based in the lower mainland of British Columbia is amplifying its efforts to resist Kinder Morgan's Trans Mountain pipeline – hailed by some analysts as the ‘Keystone of the North’.

Tsleil-Waututh Nation Chief Maureen Thomas has beseeched “dozens” of Kinder Morgan's top institutional shareholders and credit ratings agencies not to support the expansion of the company’s existing pipeline.

In the wake of Canada's NEB recommending the approval of the expansion project last month, subject to 157 conditions, Thomas has embarked on a whirlwind campaign to Ottawa and New York in protest of the proposed project, arguing that the Trans Mountain proposal presents too great a risk for the Tsleil-Waututh Nation to grant its consent.

"Tsleil-Waututh has the constitutionally protected rights and the legal tools to stop the expansion, and it is important that Kinder Morgan's investors and analysts understand that. A large oil spill in Burrard Inlet would set back all our environmental restoration efforts there, and the greenhouse-gas emissions will only make fires and floods around the world worse," the chief of the First Nation has warned.

Tsleil-Waututh is located along the shores of Burrard Inlet, in North Vancouver, across the inlet from the Burnaby terminus of Kinder Morgan's Trans Mountain pipeline.

The First Nation has also challenged the scoping of the NEB's environmental review in Canada's Federal Court of Appeal. The court’s decision could force the review to start over.

The Federal government has been given a deadline of December to make a final decision on whether the project should go ahead.

Meanwhile, Natural Resources Minister James Carr  appointed a three-member Ministerial panel in May to investigate the proposed expansion of Kinder Morgan's Trans Mountain pipelines. This additional Federal environmental assessment was announced by the Liberal government in January and will follow a different mandate than the NEB review. According to the Federal government, the additional process is intended to restore public trust and confidence in Canada's environmental assessment processes.

Carr expects the panel to report its findings in November, a month before the Federal Cabinet has to make a final decision on the project.

The British Columbia provincial government is also formally opposing the expansion plan, citing the company's failure to prove that it can meet modern oil spill safety standards.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Kinder Morgan, tel + 1 855 908 9734 or email media@transmountain.com.
Trans Mountain, tel 1 866 514 6700 or email info@transmountain.com.