‘At a $31 billion investment cost, no way the pipeline is going to recover costs’
Canadian taxpayers may end up taking a loss of $20 billion on the government-owned Trans Mountain Pipeline after costs to expand it skyrocketed, according to Morningstar Inc.
The government paid Kinder Morgan Inc. $4.5 billion for the system in 2018 after the midstream company threatened to cancel plans to nearly triple its capacity to 890,000 barrels a day. The cost of that project has soared to about $31 billion because of a range of factors including supply-chain challenges.
“At a $31 billion investment cost, no way the pipeline is going to recover costs,” Ellis said.
Trans Mountain is Canada’s only oil pipeline to tidewater, moving crude from Alberta to the British Columbia coast near Vancouver. The government bought it because it considers the expansion to be economically important, giving oil shippers the option to export their product to markets other than the US.
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