Trans Mountain pipeline is no longer profitable, a parliamentary budget watchdog has found, as the expansion project on the country’s west coast has faced years of delays, skyrocketing costs, and opposition from local communities.
The latest analysis, released Wednesday, shows the net present value of the pipeline is negative $600 million, leaving it worth about $1.2 billion less than the PBO’s estimate in December 2020.
The Trans Mountain project was bought by the federal government for $4.5 billion in 2018, after previous owner Kinder Morgan Canada Inc. threatened to scrap the pipeline’s planned expansion project in the face of environmentalist opposition.
Its expansion, for which construction is currently underway, will essentially twin the existing pipeline, raising daily output to 890,000 barrels to support Canadian crude oil production growth and ensure access to global energy markets.
On Wednesday, Adrienne Vaupshas – press secretary for federal Finance Minister Chrystia Freeland – said independent analyses from both BMO Capital Markets and TD Securities have found that the Trans Mountain pipeline project remains commercially viable.
In February, Freeland said Trans Mountain Corp. – a federal Crown corporation – will need to secure third-party funding to complete the project, either through banks or public debt markets.
A number of Indigenous-led initiatives have previously stated their intentions to pursue an equity stake in the pipeline.
There has been no indication that the Trudeau government has any intention of cancelling the pipeline project.