Trans Mountain said on Tuesday it reached a settlement with oil shippers after 18 months of negotiating a dispute about the tolls the pipeline charges its customers to carry oil.
Trans Mountain, which is owned by the Canadian government, said the deal represents the “substantial majority” of its contracted shipping volumes and has been submitted to the Canada Energy Regulator for approval.
As part of the negotiated deal, Trans Mountain said it will seek permission from the regulator to increase the proportion of its total capacity that is contracted to 90%, up from 80% currently. That means the proportion of the 890,000-barrels-per-day pipeline that is currently reserved for spot shipments will drop to 10% from 20%, if approved.
The Trans Mountain pipeline is Canada’s only east-west oil pipeline, offering direct access to China and other Asian markets at a time Canada is trying to diversify oil exports away from the United States.
A major expansion of the pipe was completed by the Canadian government in 2024, but oil companies have been pushing back against the higher tolls Trans Mountain has been charging to help cover cost overruns from the C$34 billion ($23.9 billion) project.
Trans Mountain, which has proposed adding up to 300,000 bpd of capacity through various optimization projects by 2028, said on Tuesday it will launch a formal open season on July 13 to allow shippers to bid on about 90,000 bpd of that new capacity expected to be available by year-end.
(Reporting by Amanda Stephenson Editing by Bill Berkrot)