HOUSTON--(BUSINESS WIRE)--Since receiving Government of Canada approval, Trans Mountain has been
moving forward with the regulatory, commercial and construction planning
aspects of its expansion project and has made significant positive
progress.
The expansion project came about in response to requests from oil
shippers to help them reach new markets by expanding the capacity of
North America’s only pipeline with access to the West Coast. In 2012, 13
shippers made 15- and 20-year commitments of 708,000 barrels per day or
roughly 80 percent of the capacity of the expanded pipeline, with the
other 20 percent reserved for spot volumes consistent with National
Energy Board (NEB) direction.
Following Federal approval, and consistent with its agreements with firm
shippers, Trans Mountain delivered a final cost estimate and revised
tolls to its shippers. Shippers had the option to keep their volume
commitments or turn them back and pay their share of development costs
incurred to date. Since receiving the final cost estimate and revised
tolls, some existing and prospective shippers have picked up capacity
from other shippers. The net result of that process is the turn back of
only 22,000 barrels per day or 3 percent of the previously committed
barrels. Those barrels will be made available, on the same terms as
existing commitments, to the market in an open season that will begin on
March 9. An open season is a commonly used commercial process allowing
customers to secure space on the pipeline. In this open season, the only
space available will be the 22,000 barrels per day of capacity turned
back, as the remaining 97 percent of the firm volumes are under contract
with existing or new shippers.
Kinder Morgan’s final cost estimate and increased tolls reflect the
updated project cost of $7.4 billion CAD. The higher project cost can be
attributed to a number of factors including costs associated with the
NEB’s 157 Conditions and project changes as a result of public feedback
such as thicker pipe wall, additional drilled crossings in
environmentally sensitive areas and the Burnaby Mountain tunnel.
“It’s been a lengthy and rigorous process and in spite of the many
changes in the markets over the five years since our customers signed
on, we knew commercial support for this project remained strong,” said
Ian Anderson, president of Kinder Morgan Canada.
“Over the past five years, we’ve listened to Canadians and made changes
to the project that have increased costs, but made our project better,”
added Anderson. “We’re proud of the project we’ve developed and how it
reflects the values and priorities of our communities and we’re pleased
our customers have re-confirmed their support and interest in its
purpose of delivering much needed West Coast access for their products.”
Next steps for the project include arranging acceptable financing and a
final investment decision by Kinder Morgan. Construction is set to begin
in fall 2017 and the project is expecting an in-service date of late
2019.
About Trans Mountain Expansion Project
In November 2016, the Government of Canada approved Kinder Morgan
Canada’s plan to expand the existing Trans Mountain Pipeline system –
between Edmonton, Alberta, and Burnaby, British Columbia. The project is
subject to 157 Conditions from the National Energy Board that covers the
life span of the project, and 37 Conditions attached to the
Environmental Certificate received from the Government of British
Columbia in January 2017. For almost 60 years, the 1,150-km Trans
Mountain pipeline system has been safely and efficiently providing the
only West Coast access for Canadian oil products, including about 90 per
cent of the gasoline supplied to the interior and south coast of British
Columbia. For more information, please visit www.transmountain.com.
About Kinder Morgan
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy
infrastructure companies in North America. It owns an interest in or
operates approximately 84,000 miles of pipelines and 155 terminals. The
company’s pipelines transport natural gas, gasoline, crude oil, CO2
and other products, and its terminals store and handle petroleum
products, chemicals and other products. For more information please
visit www.kindermorgan.com.
Important Information Relating to Forward-Looking Statements
This news release includes forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995 and
Section 21E of the Securities and Exchange Act of 1934. Generally the
words “expects,” “believes,” anticipates,” “plans,” “will,” “shall,”
“estimates,” and similar expressions identify forward-looking
statements, which are generally not historical in nature.
Forward-looking statements are subject to risks and uncertainties and
are based on the beliefs and assumptions of management, based on
information currently available to them. Although Kinder Morgan believes
that these forward-looking statements are based on reasonable
assumptions, it can give no assurance that any such forward-looking
statements will materialize. Important factors that could cause actual
results to differ materially from those expressed in or implied from
these forward-looking statements include the risks and uncertainties
described in Kinder Morgan’s reports filed with the Securities
and Exchange Commission, including its Annual Report on Form 10-K for
the year-ended December 31, 2016 (under the headings “Risk Factors” and
“Information Regarding Forward-Looking Statements” and elsewhere) and
its subsequent reports, which are available through the SEC’s EDGAR
system at
www.sec.gov
and on its website at ir.kindermorgan.com. Forward-looking statements
speak only as of the date they were made, and except to the extent
required by law, Kinder Morgan undertakes no obligation to update any
forward-looking statement because of new information, future events or
other factors. Because of these risks and uncertainties, readers should
not place undue reliance on these forward-looking statements.
