Canada
$5B to be spent twinning Trans Mountain pipeline

A cup of heavy oil produced at the Statoil oil sands operation near Conklin, Alberta, November 3, 2011.

Credits: REUTERS/Todd Korol

VINCENT MCDERMOTT | QMI AGENCY

FORT McMURRAY, Alta. -- Kinder Morgan Energy Partners announced Thursday that it plans to spend $5-billion to twin its Trans Mountain crude oil pipeline from Alberta to Vancouver, nearly tripling capacity from 300,000 bpd to 850,000 bpd.

The Houston-based company says it has enough commercial support from customers in Asia to accommodate 25 to 30 tankers per month at its Westridge Marine Terminal in Vancouver.

The company said that starting this summer, it will commit to spending up to two years consulting with communities affected by the planned route, including aboriginal groups and environmentalists.

"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," said Ian Anderson, president of Kinder Morgan Canada.

"We will 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."

In a statement, the company said it will also conduct studies on traditional land use, environmental concerns and socio-economic impacts as part of the construction process.

The existing Trans Mountain pipeline was built in 1953 and spans a 1,150 kilometre route between Edmonton and several terminals in Vancouver and the state of Washington.

The pipeline transports Alberta's light and heavy crude oil, as well as refined products like gasoline and diesel.

Canadian oil companies have been urging for more pipelines to the West Coast, allowing them access to lucrative Asian markets and refineries in the western U.S.

The majority of Canada's crude oil flows to the American Midwest, where an oversupply of oil has caused a bottleneck in Oklahoma and depressed global oil prices.

Since the company began in 1997, when its founders purchased the remaining pipeline assets of the now-defunct energy company Enron, Kinder Morgan has been involved in several recent oil spills. In January, more than 100,000 litres of light crude oil was spilled at a terminal in Abbotsford, B.C.

The announcement comes as Enbridge struggles to gain approval for the Northern Gateway pipeline, a project that would transport Alberta's crude oil to Asia-bound tankers in Kitimat, B.C.

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