Kinder Morgan Energy Partners announced Thursday that it will proceed with its proposed plans to expand Trans Mountain pipeline.
The company had been looking at doubling the existing capacity of 300,000 barrels per day to 600,000 bpd.
However, following the receipt of strong commitments through a recent open season, the proposed expansion would increase capacity on Trans Mountain to 850,000 bpd.
“We are extremely pleased with the strong commercial support that we received through the open season, which reinforces the appeal of our project and our approach,” said Ian Anderson, president of Kinder Morgan Canada. “This strong commercial support shows the market’s enthusiasm for expanding market access for Canadian crude by expanding an existing system.”
“We are still early in the engagement process of the project,” Anderson said. “We share respectful, open relationships with many communities and organizations interested in our business. We are committed to an 18 to 24 month inclusive, extensive and thorough engagement on all aspects of the project with local communities along the proposed route and marine corridor, including First Nations and Aboriginal groups, environmental organizations and all other interested parties. We will also consider providing financial support to local communities for environmental initiatives. We have been planning for this day for many years and we are keen to start in depth engagement this summer.”
The preliminary scope of the proposed project includes:
• Projected capital cost of approximately $5 billion.
• Twinning the existing pipeline within the existing right-of-way, where possible.
• Adding new pump stations along the route.
• Increasing the number of storage tanks at existing facilities.
• Expanding the Westridge Marine Terminal.
Anderson added, “We anticipate filing a facilities application initiating a regulatory review with the National Energy Board in 2014. If our application is approved, construction is currently forecast to commence in 2016 with the proposed project operating by 2017.”
In addition to extensive engagement, the company will conduct traditional land use and environmental and socio-economic studies, and undertake detailed engineering and design studies.
Preceding a facilities application, the company will file a commercial tolling application to review the company’s proposed commercial structure for the expansion. This filing, which is anticipated in summer 2012, will seek National Energy Board approval on how the company will charge its customers for transporting their product through the proposed expanded pipeline.
According to Kinder Morgan, the 1,150-km Trans Mountain pipeline system has been safely and efficiently providing the only west coast access for Canadian oil products for almost 60 years, including about 90 per cent of the gasoline supplied to the Interior and south coast of British Columbia.
Kinder Morgan Energy Partners, L.P. is a leading pipeline transportation and energy storage company in North America. KMP owns an interest in or operates approximately 29,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel.
KMP is also the leading provider of CO2 for enhanced oil recovery projects in North America.
Combined, KMI, KMP and KMR constitute the largest midstream energy entity in the United States with an enterprise value of over $65 billion.