The Canadian Government has committed to providing additional funding of up to $2.24bn (C$3bn) for Trans Mountain Corp’s (TMC) oil pipeline expansion to Canada’s Pacific Coast, reported Reuters citing Export Development Canada (EDC).
According to the EDC’s website, two new loan guarantees have been signed by the government for the over-budget and long-delayed Trans Mountain Expansion project in late March and early May 2023.
Last year, the government provided a C$10bn ($7.4bn) loan guarantee to TMC.
The Trans Mountain Expansion project is expected to nearly triple the crude oil flow from Alberta’s oil sands to Burnaby, British Columbia, to 890,000 barrels per day.
However, the expansion project has faced regulatory hurdles, as well as environmental opposition and construction delays. This resulted in an increase in estimated development cost from $5.47bn (C$7.4bn) in 2017 to $22.85bn (C$30.9bn).
Canadian Finance Ministry spokeswoman Marie-France Faucher was cited by Reuters as saying that a loan guarantee for the project was “common practice”.
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Faucher said: “The federal government does not intend to be the long-term owner of the project and will launch a divestment process in due course.”
She also noted that the pipeline expansion project “remains commercially viable”.
Greenpeace Canada senior energy strategist Keith Stewart said: “With the project so over-budget, the feds are going to have to sell it at a loss and taxpayers will be on the hook to repay the loans.”
The expansion involves the installation of approximately 992km of pipe, reactivating 193km of pipe, and constructing 12 new pump stations, 19 new storage tanks at existing terminals in Burnaby, Sumas, and Edmonton, and three new berths at Westridge Marine Terminal in Burnaby.