Canadian government-owned Trans Mountain Corp asked the country’s energy regulator on Thursday to reverse a decision rejecting proposed construction changes on its oil pipeline expansion, warning of a possibly “catastrophic” two-year delay and billions of dollars in losses.
If Trans Mountain goes ahead with the construction plan that is currently approved, complications could result in a borehole for the pipeline becoming compromised, forcing Trans Mountain to find an alternative installation plan, the company said in a letter to the Canada Energy Regulator (CER).
The CER this month had denied Trans Mountain’s request for a variance on a section of pipeline under construction in British Columbia. Trans Mountain had asked to be allowed to install smaller diameter pipe in a 1.4-mile (2.3-km) section of the oil pipeline’s route after encountering difficult drilling conditions due to the hardness of the rock in a mountainous area between Hope and Chilliwack.
The CER decision was yet another setback for the over-budget, delayed C$30.9-billion ($23.05 billion) expansion project (TMEP), intended to triple shipments of crude from Alberta to Canada’s Pacific coast to 890,000 barrels per day once it starts operating.
In Thursday’s letter, Trans Mountain said the hard rock conditions and fractured areas within the bedrock have allowed high rates of water ingress, causing complications. Those problems are likely to worsen if Trans Mountain has to proceed with installing larger-diameter pipe, it said.
“If the (horizontal directional drill) fails and Trans Mountain is required to implement an alternative installation plan, the TMEP schedule will likely be delayed by approximately two years, and Trans Mountain will suffer billions of dollars in losses,” the company said.
(Reporting by Rod Nickel in Winnipeg, Manitoba; editing by Jonathan Oatis and Deepa Babington)