Trans Mountain expansion still viable despite ballooning costs: Outgoing CEO
BNN Bloomberg
Despite being plagued by cost overruns and delays, the Trans Mountain pipeline expansion will still be commercially viable for whoever ultimately owns the project, according to its outgoing chief executive.
Despite being plagued by cost overruns and delays, the Trans Mountain pipeline expansion will still be commercially viable for whoever ultimately owns the project, according to its outgoing chief executive.
Ian Anderson, president and CEO of Trans Mountain Corp., said in an interview Wednesday that the Trans Mountain pipeline expansion will generate “consistent” returns for whoever owns the asset even though the company recently disclosed that the estimated total cost of building the project has ballooned to $21.4 billion, nearly double the previous estimate.
“It’s still viable, it’s still generating returns consistent with the kind of asset in our country, even at that cost — which speaks to the strength of our commercial underpinning from the very beginning,” said Anderson, who announced his retirement in February. “I have no concerns that this will be commercially viable, attractive to the future purchaser. It remains a very viable project, even at $21 billion.”
In February, Trans Mountain said that the pipeline expansion will be completed in the third quarter of 2023, later than the previous projected finish date of the end of this year. The company said the pandemic and last November’s flooding in B.C. further delayed completion of the pipeline, which runs from Strathcona County, Alta. to Burnaby, B.C., and should move about 890,000 barrels per day once finished.
Still, Anderson doesn’t expect that price tag to rise any further.
“Hopefully we’ve got enough contingency built in that we can accommodate that,” he said. “Global conditions have changed, supply chains conditions, labour shortages. I think we’ve got enough in that $21.6 billion to manage those uncertainties, but we didn’t predict what’s happening in the past two years. We can only control what we can control. But I think we’re in good shape.”
