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Both Sides Now - Has the Trans Mountain Expansion Shifted Western Canada’s Crude Oil Exports?

After a decade-long odyssey and a cost-per-mile that must make public-sector accountants in Ottawa wince, the Canadian government-owned Trans Mountain Expansion Project (TMX) — which nearly tripled the capacity of the original Trans Mountain Pipeline (TMP) from Alberta to the British Columbia (BC) coast — finally came into service in May 2024. As one of Canada’s most anticipated energy infrastructure projects in many years, the 590-Mb/d TMX pipeline — built alongside the long-standing 300-Mb/d TMP — was widely touted by its advocates as a surefire way to boost exports of Western Canadian crude and reduce the nation’s near-complete reliance on exporting crude oil to — and through — its primary customer, the U.S. In today’s RBN blog, we discuss some of the surprising (and not so surprising) market developments since the expansion project started. 

Given such a long development timeline, it is no surprise that we have discussed TMX numerous times. More recent blog examples include such topics as construction delays (see So Far Away), tolling and tankering challenges (see the two-part You’ve Got Another Thing Comin’), and just in the past couple of months, changes in the mix of committed shippers that send their crude oil down the newly expanded conduit (see Give It Up).

By way of a brief refresher, TMX (light-orange line in Figure 1 below) was proposed by Kinder Morgan in December 2013 as a 590-Mb/d pipeline that would parallel the path of the original 715-mile (1,150-kilometer), 300-Mb/d TMP (dark-orange line) that was constructed in 1953 across the rugged, mountainous terrain that separates Alberta from the BC coastline. At the time, the original cost estimate for the expansion was pegged by Kinder Morgan at C$7.4 billion (US$5.7 billion). Fast forward a decade, and after immense legal and environmental challenges and wrangling, including Kinder Morgan’s sale of the combined TMP/TMX project to the Canadian federal government in May 2018 for C$4.5 billion (US$3.1 billion) the pipeline was eventually completed and brought into service in May 2024. The most recent price tag to get the pipeline to completion and operation has been estimated from regulatory filings to be in the range of C$34 billion (US$24 billion) — 4.6 times the original estimate, with a cost-per-mile of about C$48 million (US$33 million).

Trans Mountain Pipeline, TMX and Related Pipelines and Refineries

Figure 1. Trans Mountain Pipeline, TMX and Related Pipelines and Refineries. Source: RBN 

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