Trans Mountain pipeline expansion costs going up due to delays

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The operators of the Trans Mountain pipeline project say it’s inevitable that costs to expand the pipeline will go up because of delays.

Pipeline CEO Ian Anderson says there is no final cost number for the now re-approved project but that it will be higher than the $7.4 billion price tag currently linked to the project.

“I am not going to speculate at this point what the final cost totals will be. But I think we all know that time is money and we all know that delays are going to push up costs. We are also hitting a different market in terms of competing projects and access to labour. I can give you some certainty that the number will be north of $7.4 billion,” Anderson said.

“I will have a final number in due course.”

READ MORE: Federal cabinet ministers visit Edmonton, Calgary in wake of Trans Mountain approval

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The federal government currently owns the existing pipeline. Ottawa has been in preliminary discussions with companies about selling it either before, during or after the construction of the expansion.

Anderson told reporters on Wednesday he is confident there will be oil pumping through the new pipeline by 2022.

“Construction season for me contemplates getting back to work late summer, early fall. If things go according to plan, I could see shovels in the ground as early as September,” Anderson said.

“It is premature in my mind to be thinking about the next phase of ownership in this. I have no doubt my owner will have their own timelines in mind. The execution of the project, the working of the team, I don’t foresee any of those conversations having an impact on the safe execution of the project.”

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Finance Minister Bill Morneau was in Calgary on Wednesday as part of a national blitz by the federal government. The government does plan on selling the pipeline but are short on details in terms of when a transaction may take place and how much they will sell it for.

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As part of approving the project, the government outlined the priority for Indigenous ‘buy-in’ with anywhere from 25 per cent to 100 per cent take in the project.

“I am encouraged to see a number of players come forward with interest. We have had purely commercial players come forward who are talking about how they would partner with Indigenous people. We have had all Indigenous groups come forward with backing,” Morneau said.

“I can’t predict where we will get to on that. What I can say is the project will eventually move into private sector hands.”

The federal government agreed to a number of conditions for the expansion after consultation with First Nations. Ottawa put forward eight accommodation measures.

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The changes include the Salish Sea Initiative focused on impacts on the Southern Resident Killer Whale and the Co-Developing Community Response addressing Indigenous communities’ concerns about the risks of increased project-related tanker traffic to marine activities, the environment and culturally important and sacred sites in traditional territories.

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“As a result of the re-initiated Phase III consultations, and the meaningful, two-way dialogue that included listening to concerns, responding to them, and finding solutions and accommodations, a series of amendments to the NEB’s conditions were identified,” reads a release from the federal government.

“These address impacts to asserted and established Aboriginal and Treaty Rights.”

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