The controversial Trans Mountain pipeline expansion project in western Canada, which the government nationalized in 2018, will cost 70 percent more than expected, the company said Friday.
The full cost of the project has increased from Can$12.6 to 21.4 billion ($16.8 billion), Trans Mountain said in a press release, citing the Covid-19 pandemic and disastrous flooding in British Columbia last fall as reasons for
costs soaring, reports AFP.
The construction schedule has also changed. The pipeline expansion is now expected to be completed by the third quarter of 2023, rather than the end of 2022, the company added.
The existing Trans Mountain pipeline transports 300,000 barrels of oil to the Pacific coast every day.
It is the only Canadian Pipeline that connects Alberta, the main oil-producing province, and the West Coast.
In 2018, the government of Justin Trudeau announced the nationalization of this “strategic” pipeline for Can$4.4 billion.
On Friday, Deputy Prime Minister and Finance Minister Chrystia Freeland sought to reassure the public, saying, “I want to assure Canadians that there will be no additional public money invested” in the Trans Mountain Expansion Project (TMX).
“TMX will secure necessary funding to complete the project through third party financing, either in the public debt markets or with financial institutions,” Freeland said.
“As we have said from the very beginning, our government does not intend to be the long term owner of the project.”
She re-iterated that the pipeline served “the national interest.”
In February 2020, a re-assessment of the project had already forecast that costs would jump to $12.6 billion, a sharp rise from the previously projected $7.4 billion.