$34B Trans Mountain expansion pipeline begins filling with oil with first shipments before Canada Day

The odyssey of developing and building the Trans Mountain expansion project in Western Canada is finally nearing the finish‐ ing line as sections of the pipeline begin filling with oil.

The first export shipment will happen before Canada Day, the federal Crown cor‐ poration said, although Al‐ berta's premier expects it could become operational as soon as May.

The Trans Mountain is Canada's only oil pipeline to the West Coast. The project will transport oil from Alberta to the West Coast and triple the amount of crude that is shipped on an existing pipeline, from 300,000 bar‐ rels per day to 890,000 bpd.

Canadian oil prices are ex‐ pected to increase once the new project is completed. Court challenges, regulatory hurdles, multiple protests and constant delays are all part of the history of the project, which began more than a decade ago.

Then there's the cost. When the federal govern‐ ment stepped in to purchase the project six years ago and rescue it from life support, the estimated price tag was $7.4 billion. Today, expenses are $34 billion.

'What a long, strange trip it's been'

On stage Wednesday at the CERAWeek energy confer‐ ence in Houston, Trans Mountain chief financial of‐ ficer Mark Maki used a bit of humour when describing the project's past, knowing full well how eye-popping the cost escalation and multiple setbacks have been for Cana‐ dian taxpayers and the in‐ dustry alike.

"I reflect on some lyrics from a Grateful Dead song: 'What a long, strange trip it's been.' Twelve years from be‐ ginning to in-service. That's too long," he said, drawing laughter from the crowd, be‐ fore he proceeded to list the many challenges such as the regulatory process, the pan‐ demic, floods and wildfires.

WATCH | The climbing costs of the TMX pipeline:

Currently, less than 25 per cent of the pipeline is filled with oil, said Maki, in sections of where construction took place several years ago.

He suggests there should be a post-construction cost review to see what lessons can be learned about devel‐ oping large-scale projects in Canada.

"It is expensive to do the project right. That's what it costs to build infrastructure," he said, in an interview with CBC News in Houston.

Pipelines cross long dis‐ tances, and can impact sever‐ al Indigenous communities and develop previously un‐ touched land.

"For all those reasons, we have to understand better, whoever you are, what it real‐ ly is going to cost to build in‐ frastructure."

The final price tag, he said, could still change as re‐ maining work is completed. The company has said it will need approximately three months following the com‐ pletion of construction be‐ fore it can provide a defini‐ tive cost estimate.

On Wednesday, Bloomberg reported a Chi‐ nese state-owned company, Sinochem Group, had pur‐ chased one of the first crude cargoes to move through the new pipeline.

Construction crews have focused recently on overcom‐ ing difficulties drilling through rock in B.C.'s Fraser Valley between Hope and Chilliwack and pulling the pipe into the hole.

The final piece of pipe is expected to be installed in the next few weeks, said Ma‐ ki. Next steps include work on some above ground facili‐ ties, the testing and inspec‐ tion process, and satisfying some regulatory requiremen‐ ts.

Despite all the issues over the years, Maki is adamant the project will have a posi‐ tive impact on the oilpatch, the economy, Indigenous communities and govern‐ ment coffers.

"We're happy. We're get‐ ting to the end and that's a reason to be proud and we're doing something that I think is good for the country," he said.

Opposition to the project

Some environmental critics have argued the project will impact waterways and mar‐ ine animals, while promoting expansion of the oil industry. The national regulator has previously said the project would cause "significant ad‐ verse environmental effects" on the southern resident killer whale population, while also highlighting the potenti‐ al of a pipeline leak or tanker spill.

The expansion is expected to result in a seven-fold in‐ crease in the number of oil tankers traveling through the waters around Vancouver and Victoria.

Trans Mountain has sup‐ port from dozens of Indige‐ nous communities along the pipeline route, but others have been strongly opposed, even launching years-long court challenges. At one point, the project was halted because of a lack of consider‐ ation of Indigenous con‐ cerns.

Expanding domestic oil production

This year, Canada is expected to lead the world in oil pro‐ duction growth.

"It's going to make a big difference to our producers. It's going to make a big differ‐

ence to us as a government since we charge our royalties based on [oil prices]," said Al‐ berta Premier Danielle Smith, in an interview in Houston.

Prime Minister Justin

Trudeau made the right deci‐ sion to purchase the project six years ago, she said.

"I'm pleased that they stepped in to de-risk and fin‐ ish the project," said Smith, adding how Ottawa ideally would have supported other pipelines to ensure they, too, were built, such as Energy East and Northern Gateway.

A complete Trans Moun‐ tain expansion will increase the amount of pipeline ex‐ port capacity, although in‐ dustry leaders say any spare space will be filled.

"Some were wondering, 'When TMX is done, will En‐ bridge not have as much supply going through its pipes?' We're hitting records. I expect that you'll see all of our assets continue to be used," said Enbridge's CEO Greg Ebel.

Some analysts have said the country's export pipelines could be full again in a few years, continuing the growing oil production in Western Canada.