Trans Mountain Costs to Rise 70 Percent to $9.5B

(Bloomberg) -- The cost to build the Trans Mountain pipeline expansion has increased 70% to C$12.6 billion ($9.5 billion) because of legal delays to the project and accommodations made to indigenous communities along its route, the CBC reported.

The figure includes C$1.1 billion spent by the project’s previous owner, Kinder Morgan Inc., but excludes the C$4.5 billion Justin Trudeau’s government spent to purchase the pipeline, the CBC reported. Trans Mountain Chief Executive Officer Ian Anderson is expected to announce the cost increase during a news conference Friday, the CBC reported, citing people familiar with the matter.

The cost increase threatens to be a political liability for the Canadian prime minister, who has disappointed some in his environmentalist base over his support for the crude-oil conduit. Finance Minister Bill Morneau also has scheduled a press conference for this afternoon in Ottawa.

The project would boost daily shipping capacity by 590,000 barrels, to a total of 890,000 barrels, helping relieve a transport bottleneck that has weighed on Canada’s oil industry. The pipeline, which runs from Edmonton to a shipping terminal near Vancouver, also may help develop new markets for the country’s crude in Asia.

To contact the reporter on this story:
Kevin Orland in Calgary at korland@bloomberg.net

To contact the editors responsible for this story:
Simon Casey at scasey4@bloomberg.net
Stephen Wicary, Chris Fournier