Trans Mountain Corporation announced on March 25 an Open Season for additional firm service on its 890-Mb/d Trans Mountain pipeline, which will run for approximately eight weeks starting in early April. Trans Mountain estimates the Open Season could result in 80-90% of current capacity being contracted, implying an increase of approximately a 5 to 95 Mb/d relative to the last known committed capacity figure of 707.5 Mb/d. The Company continues to expect the 90-Mb/d DRA expansion project to be completed by early 2027, and it has tightened its guidance for the size and timing of the larger Mainline Optimization Project (MOP), now proposing it would add an incremental of 210 Mb/d of capacity (previously up to 270 Mb/d), and be ready by year-end 2028 (previously over the next four to five years). It is unclear whether either of the two proposed capacity expansion projects are contingent upon the success of this Open Season: it appears the DRA project has been moving forward, but we presume the more costly MOP project would require additional shipper commitments to move forward. Separately, Trans Mountain's CEO noted in a recent interview that he expects the pipeline to be nearly full in April, as demand for space on the line has jumped due to the crisis in the Middle East. The Trans Mountain system is one of the key export conduits for Canadian crude oil, delivering barrels from Edmonton, Alberta to a marine export terminal on Canada's west coast and refineries in the Pacific Northwest.
The low end of the implied 5 to 95 Mb/d expected range of increase to Trans Mountain's committed capacity following this Open Season could mean that some of its pre-existing 707.5 Mb/d of contracted capacity will expire soon, or has recently expired, or it could reflect a scenario where the Open Season garners very little interest.
Trans Mountain still expects the 90-Mb/d Drag Reducing Agent (DRA) expansion project to be ready by early 2027. Late last year Trans Mountain indicated the project had a 12-18 month lead time, so it appears the DRA project has been progressing to this point without incremental shipper commitments. The MOP project would see the addition of 30 km (19 miles) of new 36-inch pipe north of Kamloops, BC, five new greenfield pump stations, and seven upgraded pump stations. No cost estimates have been provided for either project.
