Kinder Morgan capacity squeezed as Trans Mountain expansion hits delay

Kinder Morgan Canada

Permitting issues continue to delay construction of the expansion of the Trans Mountain Pipeline from Edmonton to Burnaby, and lack of capacity remains a concern.

As lawyers stood this week before the National Energy Board arguing whether Kinder Morgan should be able to bypass the City of Burnaby’s regulatory process to start the build, some producers looking to ship on the existing system were out of luck.

The pipeline, which has been operating since the 1950s, is oversubscribed by 23 percent overall for the month of December, Kinder Morgan reported to the Daily Oil Bulletin this week.

The pipeline will ship 309,604 bbls/d for December, including 78,917 bbls/d to the Westridge Dock for export.

The overbook is not an unusual situation – according to DOB records this has occured throughout 2017.

According to the National Energy Board, which notes that Trans Mountain capacity varies depending on the proportion of heavy and light crude transported, capacity on the pipeline is 300,000 bbls/d assuming 20 percent of the oil in the pipeline is heavy.

NEB data show that Trans Mountain utilization averaged 105 percent in 2015.

After receiving federal approval to proceed with the 890,000 bbl/d Trans Mountain Expansion project, Kinder Morgan gave it the corporate green light in May 2017, expecting construction to begin in September.

The company has now pushed that into next year, anticipating that “the first part of 2018” will be spent working on permitting.

The NEB decision on Burnaby permitting has not yet been made public.

JWN Energy