Before the end of 2020, construction is expected to be underway across the entire line
With a new year ahead of us and recent court decisions announced, the Trans Mountain Expansion Project is accelerating. Work is well underway with pipe in the ground and terminal construction in Alberta, and significant work ongoing at the Burnaby and Westridge Marine Terminals in British Columbia. Before the end of 2020, construction is expected to be underway across the entire line.
“Today, we have more than 2,900 people working on the Project and that number will grow significantly in the months ahead. With 65 per cent of the detailed route approved, and a process established by the Canada Energy Regulator for the remainder in progress, the path forward is clear. Construction is accelerating and we’re very excited to be delivering this important Project and on our commitments to Canadians, our customers and communities,” says Ian Anderson, President and CEO of Trans Mountain Corporation.
The Trans Mountain Corporation Board of Directors recently approved a Project cost estimate of $12.6 billion to bring it into service by the end of 2022. To date, the company has spent $2.5 billion in respect to the Project, which includes the impact of delays and the resulting additional regulatory process. It is anticipated that an additional $8.4 billion will be spent to complete the Project, plus $1.7 billion of financial carrying costs. The company has also recommended to the Government of Canada in its capacity as owner and lender, a further $600 million reserve for cost impacts beyond the control of Trans Mountain. This cost will be presented to the Government of Canada as part of the process to obtain the necessary funding of the Corporation’s capital needs. This estimated cost of the Expansion reflects today’s realities of enhanced environmental protections, security, quality assurance and Indigenous inclusion, and is based on reasonable assumptions, including the completion of regulatory approvals, permits and route hearings.
The Corporation’s projected earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to be at least $1.5 billion in the first year of the Project’s operation and expected to grow annually. These projections are underpinned by long-term contractual commitments covering 80 per cent of the system’s 890,000 barrels a day of capacity.
The board also affirmed that this Project remains commercially viable, and that Canada’s overall investment in Trans Mountain remains on course to generate a return at commercial levels.
The Project is also expected to drive significant economic benefits for workers, businesses and Indigenous communities across Alberta, British Columbia and the country. At peak construction, there will be approximately 5,500 workers employed in communities along the construction corridor in Alberta and British Columbia. Trans Mountain is prioritizing and maximizing Indigenous, local and regional hiring to the greatest extent possible. Canadians will also benefit from the economic and tax contributions made by the Project once it is in operation. Communities along the construction corridor will benefit from significant tax dollars, which are anticipated to exceed $52 million annually, contributing to these local communities’ ability to meet their respective social, economic and development goals.
“Today’s Trans Mountain Expansion Project has seen significant changes, enhancements and improvements since it was originally envisioned in 2009, and first introduced to the public in 2012. The Project has set new standards for Indigenous participation and inclusion – with 58 signed agreements worth over $500 million. The Project reflects the input and feedback from thousands of Canadians and incorporates the very best safety and environmental protections. From the installation of state-of-the-art leak detection and monitoring technology, route adjustments to avoid sensitive areas, tunneling versus trenched crossings, to installing more valves and ground water monitoring stations, Canadians will be proud to know that Trans Mountain has established the very highest benchmark for the development and construction of a major energy infrastructure project,” says Anderson.
Canadians will benefit from the economic and tax contributions made by the Project once it is operation. In addition, Trans Mountain will make payments to the British Columbia government of between $25 million and $50 million annually, for a total contribution over a 20-year period of up to $1 billion. These funds are to be used by the B.C. Clean Communities program to fund local, environmental projects everywhere in British Columbia.
Trans Mountain will continue to provide updates on its construction activities as the Project proceeds.
Source: Company Press Release