Trans Mountain Completes Final Cost Estimate Review with Shippers; Maintains Strong Commercial Support for Expansion Project
March 09 2017 - 9:00AM
Business Wire
Since receiving Government of Canada approval, Trans Mountain
has been moving forward with the regulatory, commercial and
construction planning aspects of its expansion project and has made
significant positive progress.
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The expansion project came about in response to requests from
oil shippers to help them reach new markets by expanding the
capacity of North America’s only pipeline with access to the West
Coast. In 2012, 13 shippers made 15- and 20-year commitments of
708,000 barrels per day or roughly 80 percent of the capacity of
the expanded pipeline, with the other 20 percent reserved for spot
volumes consistent with National Energy Board (NEB) direction.
Following Federal approval, and consistent with its agreements
with firm shippers, Trans Mountain delivered a final cost estimate
and revised tolls to its shippers. Shippers had the option to keep
their volume commitments or turn them back and pay their share of
development costs incurred to date. Since receiving the final cost
estimate and revised tolls, some existing and prospective shippers
have picked up capacity from other shippers. The net result of that
process is the turn back of only 22,000 barrels per day or 3
percent of the previously committed barrels. Those barrels will be
made available, on the same terms as existing commitments, to the
market in an open season that will begin on March 9. An open season
is a commonly used commercial process allowing customers to secure
space on the pipeline. In this open season, the only space
available will be the 22,000 barrels per day of capacity turned
back, as the remaining 97 percent of the firm volumes are under
contract with existing or new shippers.
Kinder Morgan’s final cost estimate and increased tolls reflect
the updated project cost of $7.4 billion CAD. The higher
project cost can be attributed to a number of factors including
costs associated with the NEB’s 157 Conditions and project changes
as a result of public feedback such as thicker pipe wall,
additional drilled crossings in environmentally sensitive areas and
the Burnaby Mountain tunnel.
“It’s been a lengthy and rigorous process and in spite of the
many changes in the markets over the five years since our customers
signed on, we knew commercial support for this project remained
strong,” said Ian Anderson, president of Kinder Morgan Canada.
“Over the past five years, we’ve listened to Canadians and made
changes to the project that have increased costs, but made our
project better,” added Anderson. “We’re proud of the project we’ve
developed and how it reflects the values and priorities of our
communities and we’re pleased our customers have re-confirmed their
support and interest in its purpose of delivering much needed West
Coast access for their products.”
Next steps for the project include arranging acceptable
financing and a final investment decision by Kinder Morgan.
Construction is set to begin in fall 2017 and the project is
expecting an in-service date of late 2019.
About Trans Mountain Expansion
Project
In November 2016, the Government of Canada approved Kinder
Morgan Canada’s plan to expand the existing Trans Mountain Pipeline
system – between Edmonton, Alberta, and Burnaby, British Columbia.
The project is subject to 157 Conditions from the National Energy
Board that covers the life span of the project, and 37 Conditions
attached to the Environmental Certificate received from the
Government of British Columbia in January 2017. For almost 60
years, the 1,150-km Trans Mountain pipeline system has been safely
and efficiently providing the only West Coast access for Canadian
oil products, including about 90 per cent of the gasoline supplied
to the interior and south coast of British Columbia. For more
information, please visit www.transmountain.com.
About Kinder Morgan
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy
infrastructure companies in North America. It owns an interest in
or operates approximately 84,000 miles of pipelines and
155 terminals. The company’s pipelines transport natural gas,
gasoline, crude oil, CO2 and other products, and its terminals
store and handle petroleum products, chemicals and other products.
For more information please visit www.kindermorgan.com.
Important Information Relating to Forward-Looking
Statements
This news release includes forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995 and Section 21E of the Securities and Exchange Act of 1934.
Generally the words “expects,” “believes,” anticipates,” “plans,”
“will,” “shall,” “estimates,” and similar expressions identify
forward-looking statements, which are generally not historical in
nature. Forward-looking statements are subject to risks and
uncertainties and are based on the beliefs and assumptions of
management, based on information currently available to them.
Although Kinder Morgan believes that these forward-looking
statements are based on reasonable assumptions, it can give no
assurance that any such forward-looking statements will
materialize. Important factors that could cause actual results to
differ materially from those expressed in or implied from these
forward-looking statements include the risks and uncertainties
described in Kinder Morgan’s reports filed with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for
the year-ended December 31, 2016 (under the headings “Risk Factors”
and “Information Regarding Forward-Looking Statements” and
elsewhere) and its subsequent reports, which are available through
the SEC’s EDGAR system at www.sec.gov and on its website at
ir.kindermorgan.com. Forward-looking statements speak only as of
the date they were made, and except to the extent required by law,
Kinder Morgan undertakes no obligation to update any
forward-looking statement because of new information, future events
or other factors. Because of these risks and uncertainties, readers
should not place undue reliance on these forward-looking
statements.
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Trans MountainMedia RelationsAli Hounsell855-908-9734 or
604-908-9734media@transmountain.comwww.transmountain.comorKinder
Morgan, Inc.Investor
Relations855-908-9734km_ir@kindermorgan.comwww.kindermorgan.com
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