Trans Mountain Corp’s request for a variance on a section of pipeline in British Columbia, part of the Trans Mountain Expansion (TMX) project, has been denied by the Canada Energy Regulator (CER), a decision that could delay the 590,000 barrel-per-day (bpd) expansion, Reuters reported on Tuesday.
Trans Mountain had been seeking to install a smaller diameter pipe in a 2.3 kilometre section of the oil pipeline's route after encountering "very challenging" drilling conditions due to the hardness of the rock in a mountainous area between Hope and Chilliwack, the media outlet noted.
The Canadian regulator said it would provide reasons for its decision as soon as possible but hasn’t done so yet because Trans Mountain asked for an expedited process.
At a hearing on November 27, representatives of Trans Mountain stated that installing the smaller pipe would save 59 days of construction time and keep the expansion on track for a start date late in the first quarter of 2024.
The TMX project aims to triple shipments of crude oil from Alberta to the Pacific coast to 890,000 bpd once operations begin.
TMX's costs, however, have climbed over the course of construction from an original estimate of $5.4 billion to $30.9 billion most recently.
The pipeline is expected to close the gap on the discount Canadian crude price receives as compared to the US West Texas Intermediate (WTI) benchmark.
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