The Canada Energy Regulator (CER) on Friday said it would issue a decision on a variance request from the Trans Mountain pipeline expansion project “in due course,” following a one-day oral hearing in Calgary.
Trans Mountain has 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 “very challenging” drilling conditions due to the hardness of the rock in a mountainous area between Hope and Chilliwack.
The CER denied that request on Dec. 5, prompting Trans Mountain to then ask the regulator to reverse the decision on the grounds it could cause a “catastrophic” two-year delay and billions of dollars in losses.
During Friday’s oral hearing, the CER asked Trans Mountain to address outstanding questions about the quality of materials it intended to use for the smaller section of pipe and how it would conduct inspections within the pipeline.
Tran Mountain’s lawyer Sander Duncanson urged the CER to make a decision on the variance request quickly. The long-delayed project is meant to start operating by the end of March.
“Every day of delay in this installation will likely delay the ultimate in-service date for the project. Every week of delay…will cost Trans Mountain alone approximately C$50 million ($37.30 million),” Duncanson said.
The C$30.9-billion Trans Mountain expansion will nearly triple the flow of crude from Alberta to Canada’s Pacific Coast but has been plagued by years of regulatory delays and massive cost over-runs.
Prime Minister Justin Trudeau’s Liberal government bought the pipeline in 2018 to ensure the expansion, intended to open up Asian refining markets to Canadian producers, went ahead.
Concerns about further delays and the variance request being rejected have weighed on Canadian heavy crude prices in recent months.
(Reporting by Nia Williams; Editing by Leslie Adler and Franklin Paul)