British Columbia Approves Kinder Morgan’s Trans Mountain Pipeline
British Columbia approves pipeline expansion
The Canadian province of British Columbia approved Kinder Morgan’s (KMI) Trans Mountain Pipeline expansion project on January 11, 2017. The province has attached 37 conditions to the approval, over and above the 157 conditions imposed by Canada’s National Energy Board. This approval was the last of the major regulatory hurdles for the expansion project. Kinder Morgan plans to begin construction of the pipeline in September 2017 with an in-service date expected in late 2019.
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However, like many other pipeline projects, the project still faces opposition from various environmental and indigenous groups.
The project expands KMI’s existing Trans Mountain Pipeline system between Edmonton, Alberta, and Burnaby, British Columbia. As the above graph shows, the expansion would create a “twinned pipeline,” increasing the capacity of the system from 300,000 barrels per day to 890,000 barrels per day.
Kinder Morgan has agreed to pay British Columbia as much as 1 billion CAD (Canadian dollars) over 20 years under a revenue-sharing agreement. This amount will be paid in installments of 25 million CAD and 50 million CAD a year.
Why is the project important for Canada?
Kinder Morgan’s Trans Mountain project paves the way to unlock access to world markets by facilitating the movement of oil to the West Coast for marine transport to market. More pipelines are necessary to facilitate movement of oil out of Alberta’s reserves.
According to KMI, the expansion will result in $46.7 billion in taxes and royalties for the Canadian government and more than 800,000 person-years of employment over the life of the project. It will also enable producers to capture an additional $73.5 billion in revenues.