February 10, 2020 [Kallanish Energy] – The Canadian government’s plan to expand the TransMountain pipeline cleared a legal hurdle this week, stirring optimism the project will proceed, Kallanish Energy reports.
The Federal Court of Appeal ruled Tuesday in Ottawa prime minister Justin Trudeau’s government sufficiently consulted with First Nations along the line’s route, and the regulatory review of the project included all necessary points.
The ruling signals one of the final remaining legal challenges to the project may be overcome, which would help keep construction from being interrupted and allow the expanded line to start shipping oil by its 2022 target.
However, the ruling is almost certain to be appealed to Canada’s Supreme Court, David Austin, an energy lawyer at Stirling LLP in Vancouver, told Bloomberg. “The final judicial review rests at the Supreme Court of Canada level, and until it’s weighed in, the process is not over,” Austin said in an interview pre-ruling.
The Trans Mountain project is strongly backed by Canada’s oil producers, which have had to deal suffered with a lack of pipeline capacity that’s kept local crude prices down and prevented output expansion.
In 2018, the Canadian federal government purchased the existing pipeline for C$4.5 billion ($3.41 billion) from Kinder Morgan Canada, with plans to expand the pipeline, a C$9.3 billion ($7.04 billion) project.
The pipeline expansion would run 715 miles from Edmonton, Alberta, to Burnaby, British Columbia. Construction began in early December 2019, and the line could be in service by mid-2022.
The new line will be built parallel to the existing line for crude and refined oil. The expansion would nearly triple capacity to 890,000 barrels of oil per day from Alberta’s oil sands. The current oil pipeline transports about 300,000 Bpd.
Expanding the line would open the possibility of developing new markets for Canadian crude in Asia and reducing dependence on U.S. refiners.
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