Tudor, Pickering & Holt on Monday said it expects a positive decision from the Federal cabinet to expand the Trans Mountain pipeline after previous approvals were blocked in the courts due to inadequate consultation with indigenous communities and concern with the scope of an environmental review.
The project would see the Edmonton, Alberta, to Vancouver line’s capacity raised to 890,000 barrels per day from 300,000 and would provide Western Canadian oil producers with their first significant access to international markets.
“The pipeline is a 590 mbpd expansion of the existing line delivering crude to terminals on the west coast, providing much needed incremental egress to global markets for Canadian crude, the investment bank said in a note. “We think the pipeline will be approved by the federal government after the National Energy Board re-recommended the project should proceed back in Feb’19. Additional analysis on west coast tanker traffic and consultations with Indigenous groups were re-performed by the government to satisfy concerns made by the Federal Court of Appeal in its decision to rescind the original approval. We think the political ramifications of not approving the project purchased by the government for C$4.5B and support building from Indigenous groups (two groups now vying for ownership) will be enough to greenlight the pipeline. Construction could begin later this year with a 30 month timeline (2 build seasons) resulting in possible in-service of Q1’22.”
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