The Canadian Government has announced that it will stop investing additional public money in the under-construction Trans Mountain Expansion Project.
The decision comes as the project’s development cost rose by 70% from $9.9bn (C$12.6bn) to $16.82bn (C$21.4bn).
The project, which involves twinning the existing Trans Mountain pipeline, along with other works, is currently in the second half of its construction phase.
The Department of Finance Canada said that the Trans Mountain Corporation (TMC) will instead obtain the necessary funding for the project via third-party financing.
The department stated: “The government has engaged both BMO Capital Markets, and TD Securities to provide advice on financial aspects of the project. Their analyses confirm that public financing for the project is a feasible option that can be implemented promptly.
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“They have also confirmed that, despite the increased cost estimate and completion timeline, the project remains commercially viable.”
Government-owned company Trans Mountain is developing the expansion project, revised the project’s cost estimate, following a full review.
The revised costs include all known financing, enhancements, delays, and changes.
It also considers the impact of the Covid-19 pandemic and the significant preliminary impacts of the floods, in British Columbia, in November 2021.
Trans Mountain expects the project’s mechanical completion to be achieved in Q3 2023.
Besides twinning the existing Trans Mountain pipeline, the project includes the expansion of the Westridge Marine Terminal, in Burnaby.
Trans Mountain president and CEO Ian Anderson said: “The progress we have made over the past two years is remarkable when you consider the unforeseen challenges we have faced, including the global pandemic, wildfires, and flooding.
“At every step of the way, we have found solutions and responded. As a result, the project is advancing with significantly improved safety and environmental management, and with a deep commitment to ensuring this project is being built the right way.”
Earlier this month, Crescent Point Energy announced that it was considering selling some of its assets in Alberta and Saskatchewan, Canada.