The Trans Mountain Expansion (TMX) will nearly treble the flow of crude from Alberta’s oil sands to Burnaby, British Columbia, but the project has struggled with regulatory delays, environmental opposition and surging costs.
The expansion is expected to cost C$30.9 billion ($23.01 billion), more than four times the original estimate, according to TMC’s most recent update in March, which also said the final bill could rise further.
In an application to the Canadian Energy Regulator (CER) dated June 1, TMC proposed a base toll of C$11-C$12 ($8-$9) a barrel, depending on the type of crude shipped and its final destination. Any shipper committing to a term longer than 15 years or more than 75,000 bpd would receive a discount.
The filing also said the toll is based on the latest project cost estimate, and is not final. It would increase by around C$0.07 a barrel for every extra C$100 million spent finishing the pipeline.
BMO Capital Markets analyst Ben Pham said in a note to clients the TMX tolls compare to a toll of $8-$10 a barrel for Canadian crude to get to the U.S. Gulf Coast, but is still “well above” the initial TMX expected toll of around $4.50 a barrel.
Committed shippers on the pipeline, including Cenovus Energy, Suncor Energy and Canadian Natural Resources Ltd did not immediately respond to requests for comment.
TMC asked the regulator to rule on whether it approves the tolls by Sept. 14 this year.
The expansion is due to be mechanically complete by the end of this year and is expected to start shipping in the first quarter of 2024.
(Reporting by Nia Williams; editing by Barbara Lewis)