Trans Mountain Expansion Receives Strong Binding Commercial Support

abarrelfull wrote on 13 Apr 2012 08:03
Tags: canada kinder-morgan n-america oil pipeline

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Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today announced it will proceed with its proposed plans to expand the existing Trans Mountain pipeline system following the receipt of strong binding commitments through the recently concluded open season. A diverse group of existing and new shippers submitted 660,000 barrels per day (bpd) of binding commercial support for the open season. All commitments are for a 20-year term. When completed, the proposed expansion will increase capacity on Trans Mountain from the existing capacity of 300,000 bpd to 850,000 bpd.

"We are extremely pleased with the strong commercial support that we received through the open season, which reinforces the appeal of our project and our approach," said Ian Anderson, president of Kinder Morgan Canada. "This strong commercial support shows the market's enthusiasm for expanding market access for Canadian crude by expanding an existing system." This support from the market better defines the project and enables Kinder Morgan Canada to fully engage the local communities.

"We are still early in the engagement process of the project," Anderson said. "We share respectful, open relationships with many communities and organizations interested in our business. We are committed to an 18 to 24 month inclusive, extensive and thorough engagement on all aspects of the project with local communities along the proposed route and marine corridor, including First Nations and Aboriginal groups, environmental organizations and all other interested parties. We will also 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."

The preliminary scope of the proposed project includes:

• Projected capital cost of approximately $5 billion.
• Twinning the existing pipeline within the existing right-of-way, where possible.
• Adding new pump stations along the route.
• Increasing the number of storage tanks at existing facilities.
• Expanding the Westridge Marine Terminal.

Anderson added, "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."

In addition to extensive engagement, the company will conduct traditional land use and environmental and socio-economic studies, and undertake detailed engineering and design studies.

Preceding a facilities application, the company will file a commercial tolling application to review the company's proposed commercial structure for the expansion. This filing, which is anticipated in summer 2012, will seek National Energy Board approval on how the company will charge its customers for transporting their product through the proposed expanded pipeline.

For almost 60 years, the 1,150-km Trans Mountain pipeline system has been safely and efficiently providing the only west coast access for Canadian oil products, including about 90 percent of the gasoline supplied to the interior and south coast of British Columbia.

• Trans Mountain Expansion Receives Strong Binding Commercial Support

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