Kinder Morgan scales back pipeline capacity for expansion project

Friday, May 25, 2012

BURNABY NOW

Kinder Morgan is scaling back capacity for the proposed Trans Mountain pipeline expansion, now that oil shippers have inked their contracts for future use of the line.

 
"The signing of contracts with shippers, marks the next step in the commercial support process and finalizes the commitments of those who expressed initial interest," said Lexa Hobenshield, a Kinder Morgan spokesperson. "This means that we now have a final scope for a proposed expansion to 750,000 barrels per day capacity from the initial scope of 850,000 barrels per day."
 
The pipeline's current capacity is 300,000 barrels per day, and Kinder Morgan initially wanted to increase that to 850,000.
 
Hobenshield said that a few shippers failed to obtain their respective board's approval to continue.
 
"It's not uncommon for commitments to change during this period as companies finalize their needs and review the numbers before signing contracts," she said.
 
Kinder Morgan has not yet applied to the National Energy Board for project approval.
 
"We are in the early stages of the process that includes 18 to 24 months of comprehensive and thorough studies, extensive Aboriginal and stakeholder engagement and subsequent regulatory reviews," Hobenshield said.
 
Ben West of the Wilderness Committee called the downsized capacity "misleading."
 
"What is really relevant is the total potential capacity of this pipeline expansion project," he said in a media statement. "Frankly, it's inappropriate for them to be out there signing contracts before they have approval, and those that backed away were smart to do so. Kinder Morgan is going to have a very hard time building this new pipeline."
 
According to a report by economist Robyn Allan, the Kinder Morgan pipeline expansion project could actually facilitate 1.1 million barrels a day, resulting in 475 tankers a year in Burrard Inlet - up from the current 80 annual tankers.
 
"When Kinder Morgan finally makes their submission to the National Energy Board they should be straight with the public and base it on the total potential of their expanded pipeline" West said.
 
Hobenshield, however, estimated fewer tankers in local waters.
 
"Our original estimation of future tanker traffic based on preliminary commitments of 850,000 barrels per day was about 25 to 30 tankers per month, based on existing Aframax tanker size - this is what our proposed expansion is based on. With a proposed project of 750,000 barrels per day capacity, we are estimating that the number of tankers will be in the 20 to 25 per month range," she said.
 
The Trans Mountain pipeline runs various oil products from Alberta to Burnaby.
 
 
 
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