Kinder Morgan to proceed with $5-billion Trans Mountain pipeline expansion to Burnaby‏

Oil pipeline expansion to be 40 per cent larger than anticipated on strong demand

By Gordon Hamilton, Vancouver Sun April 12, 2012

Oil tanker in Burrard Inlet off of refinery fed by Kinder Morgan pipeline.

Kinder Morgan Energy Partners said Thursday that it intends to expand plans to twin the Trans Mountain oil pipeline after receiving enough commitments from Asian customers to accommodate 25 to 30 tankers a month at its Westridge, Burnaby terminal.
The proposed expansion of the existing Alberta-to-Metro Vancouver pipeline, which Kinder Morgan wants operational by 2017, is to cost $5 billion. It will increase pipeline capacity for oilsands crude by 550,000 barrels a day; from the current 300,000 barrels a day to 850,000 barrels.
The expansion is bound to be controversial; Kinder Morgan now plans to construct as much new capacity as Enbridge Inc. has proposed for its contentious Northern Gateway pipeline, said Wilderness Committee campaigner Ben West.
“This is now the biggest proposal,” said West. “A bigger pipeline means bigger opposition.”
Texas-based Kinder Morgan made the announcement after completing a so-called “open season” to seek binding commitments from potential pipeline customers to book capacity on the pipeline. Kinder Morgan received more commitments than initially anticipated — enough to ship 660,000 barrels a day for a 20-year term. It has three markets for the oil: Metro Vancouver, Washington State and offshore exports. Most of the customer commitments came from Asia, said Kinder Morgan Canada president Ian Anderson.
“Most of these commitments are for movements via our Westridge terminal — heavy oil movements through Westridge onto tankers. We will be working diligently with all the local communities and environmental interests around those issues and concerns,” he said in a telephone interview from Calgary. “This level of commitment will equate to approximately 25 to 30 tankers per month. Today we are moving anywhere from five to 10.”
Of the 660,000 barrels a day in commitments, 500,000 barrels is expected to go to the Westridge dock, Anderson said.
Anderson said the strong commercial support for the pipeline expansion “shows the market’s enthusiasm for expanding market access for Canadian crude by expanding an existing system,”
He said the Trans Mountain proposal has attracted so much interest because it offers access to new markets through a facility that already exists.
“The facilities are there today. The port is there today, the pilots, the tug operators, the first-responders are all there. I think there is a belief that that has merit and expansion of existing infrastructure is a feasible way to go.”
The next step for Kinder Morgan, he said, is to seek approval from the National Energy Board this summer for the commercial terms it has entered into with customers.
Detailed design and routing work, along with consultations with communities and first nations, is to take place over the next 18-24 months.
Anderson expects Kinder Morgan to file an official proposal to build the pipeline with the National Energy Board in late 2013. If it receives approval by 2015, construction could be completed by 2017. He said two-thirds of the $5 billion cost would be spent in B.C.
Anderson said Kinder Morgan intends to listen to local concerns over the pipeline expansion.

Kinder Morgan's pipeline rupture in 2007 devastated a Burnaby residential area.

“We will try as best we can to accommodate all the environmental concerns and interests.”
West said despite Kinder Morgan assurances, an oil spill is inevitable if tanker traffic increases in Burrard Inlet.
“No level of preparedness would be adequate,” he said, noting the tankers are expected to be larger than the Exxon Valdez, which spilled more than 250,000 barrels of oil into Alaska’s Prince William Sound when it hit a reef in 1989.
“A spill would be totally devastating.”
Veteran environmentalist Tzeporah Berman said as a Vancouver resident, she is “extremely concerned” about increased supertanker traffic “and the frankly unacceptable risk of leaks and oil spills in Burrard Inlet.”
“Between this and the Gateway proposal it feels like British Columbia is under siege by big oil. For what? These pipelines mean our gas prices rise, we have to import more oil and we will likely be stuck with big clean up bills.”
Canadian oil producers have been urging development of a line to let them tap high-paying Asian markets and U.S. West Coast refineries. The majority of Canada’s oil exports now flow to the U.S. Midwest, where a glut of crude at the Cushing, Oklahoma, storage hub has depressed prices.
Production from Alberta’s oilsands, the world’s third largest crude oil reserve, is set to nearly double to 3 million barrels per day by 2020.
The 1,150-kilometre Trans Mountain pipeline was originally built in 1953 to bring oil to southwestern B.C.
ghamilton@vancouversun.com

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