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The Canada Energy Regulator (CER) has approved a request by Trans Mountain Corp. for a variance on a section of pipeline in B.C., a move that will allow the company to complete the expansion project by early this year.

The variance request was for a 2.3-kilometre stretch of pipe between the communities of Hope and Chilliwack, B.C., where Trans Mountain Corp. had encountered difficulties drilling through hard rock. The company had asked the regulator to allow it to use a different size, thickness and coating of pipe than originally planned, arguing that the change would not compromise the pipeline’s quality or integrity.

The CER had initially denied the request in November 2023, citing concerns about the sourcing and testing of the alternate pipe size. However, after Trans Mountain submitted additional information and assurances, the regulator reconsidered its decision and granted the variance on January 12, 2024.

  • Technical challenges: Trans Mountain faced hard rock conditions and water ingress that increased the risk of borehole compromise or HDD failure if it continued with the 48-inch ream pass required to install NPS 36 pipe.
  • Schedule and cost impacts: Trans Mountain estimated that if the HDD failed and it had to implement an alternative installation plan, the TMEP schedule would be delayed by about two years and Trans Mountain would suffer billions of dollars in losses.
  • Design and operation: Trans Mountain stated that installing NPS 30 pipe would not affect the maximum operating pressure or the nominal capacity of the pipeline, and that all stress levels in the pipe were within the acceptable limits of CSA Z662.
  • Material quality: Trans Mountain purchased NPS 30 pipe from distributors and not from manufacturers on its AML, but it carried out additional measures to ensure the pipe was suitable for use, such as visual inspection, review of material test reports, CVN testing, and coating. Trans Mountain’s Engineer of Record confirmed pipe conformance to CSA Z662 and TMEP specifications.
  • Inspection: Trans Mountain committed to install trap facilities to enable full in-line inspection of the pipeline segment before the in-service date.

The regulator was satisfied that Trans Mountain had addressed all of its concerns and demonstrated that the variance would not pose any safety or environmental risks. Detailed Reasons for Approval were released on January 31.

The approval of the variance request is a significant milestone for the Trans Mountain expansion project, which will increase the capacity of Canada’s only oil pipeline to the West Coast from 300,000 barrels per day to 890,000 barrels per day. The project has faced numerous legal and regulatory challenges, as well as opposition from some Indigenous groups and environmental activists.

Trans Mountain Corp., a Crown corporation that owns and operates the pipeline, has said that it expects to complete the mechanical construction of the project by February 2024, and that the pipeline can enter service within one month of completion. The company has also said that for each week the project is delayed, it loses $50 million in lost oil shipping revenue.

The completion of the Trans Mountain expansion project is eagerly anticipated by the oil industry and some provincial governments, especially Alberta and Saskatchewan, which have been struggling with low oil prices and limited market access. The project is expected to create thousands of jobs, generate billions of dollars in economic benefits, and increase Canada’s energy security and competitiveness.

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