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Trans Mountain oil pipeline expansion may start in September

© Reuters. Steel pipe for Canadian government’s Trans Mountain Expansion Project lies at a stockpile site in Kamloops

By Nia Williams (NYSE:) and Rod Nickel

CALGARY, Alberta/WINNIPEG, Manitoba (Reuters) – Construction on expanding the Trans Mountain oil pipeline could begin in September, assuming the next regulatory steps go smoothly, the project’s chief executive said on Wednesday.

The C$7.4 billion ($5.56 billion) project was stalled a year ago after a Canadian court ruled the federal government, which also owns Trans Mountain, failed to adequately consult indigenous groups. Prime Minister Justin Trudeau on Tuesday reapproved the expansion, cheering the oil industry but angering environmental groups.

Expanding Trans Mountain would ease congestion on pipelines that move Alberta crude, lifting Canadian prices.

“If things go according to plan, I can see shovels in the ground as early as September,” said Trans Mountain CEO Ian Anderson on a conference call. “… Getting started is the most critical thing.”

Construction looks to take 30 to 34 months, he said. Oil could flow through the twinned pipeline by the second or third quarter of 2022, delayed by about a year since last year’s court decision, Anderson said.

Work to obtain building permits started on Wednesday, Canadian Finance Minister Bill Morneau said separately in Calgary.

Once complete, the project will triple the capacity of Trans Mountain, which carries crude from Alberta’s oil sands to British Columbia’s Pacific Coast.

Supporters say it is a vital conduit to help Canadian oil reach higher-priced international markets, but opponents including environmental and indigenous groups and some municipalities along the route argue the risk of a spill is too great.

Trudeau’s government bought the pipeline last year from Kinder Morgan (NYSE:) Canada for C$4.5 billion to help the expansion project get built.

Opponents of Trans Mountain are expected to challenge the approval in court. Morneau said the government felt it had fulfilled its duty to consider environmental impacts and consult with indigenous groups.

“Our view is we have done the work we need to do to make sure this project can go forward in the right way,” he said.

In British Columbia, where the provincial government opposes the project, a protest against Trans Mountain took place in Vancouver on Tuesday evening and another is planned in Victoria on Saturday.

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Source: Investing.com