No joke.The Trans Mountain pipeline expansion will finally begin taking on oil sometime next month as it limps to a possible May startup to finally begin shipping Alberta crude oil to tidewater and marking the start of what government and industry hopes will be a new period of growth.Finally..“We continue to work toward an anticipated in-service date in the second quarter of 2024,”Trans Mountain.According to one of Canada’s largest oil producers, Calgary-based MEG Energy, the taxpayer-owned pipeline has issued requests for more than two million barrels starting in April and an equal volume in May.Derek Evans, MEG’s chief executive officer, made the disclosure during a conference call with analysts on Friday to discuss the company’s quarterly financial results. In regulatory filings, Trans Mountain said it had hoped to begin meeting contractual arrangements with shippers starting May 1. The earlier April requisition confirms that date because the 1,700 km length has to be filled and brought to pressure before the oil can actually flow and loaded onto tankers..In that regard, the company this week issued an update on the progress of the final remaining 2.1-km section between Hope and Chilliwack where it said it had successfully removed the stuck pipe from the original setback and was preparing to coat and weld it together.“We continue to work toward an anticipated in-service date in the second quarter of 2024,” it said.On Friday, Trans Mountain filed a final schedule with the Canadian Energy Regulator (CER) for the final testing and clean-up of major sections and facilities along the right of way and putting on the final finishing touches..If so, it will mark the end of the line for the embattled project which was originally supposed to be in service by 2017 when it was first conceived almost a decade ago and triple the existing capacity to 890,000 barrels per day (bpd). Earlier this week Trans Mountain also indicated the project cost had jumped another 10% to $34 billion, almost seven times more than the $5.4 billion it was projected to cost in 2013.By the time previous owner Kinder Morgan sold it to the Liberal government in 2018, that figure had already climbed to $7.4 billion before a single piece of pipe had been laid in the ground. When it actually did in 2019, the tally had already hit $12.6 billion — before the pandemic, generational floods that wiped out most of the Lower Mainland and successive legal and regulatory delays.And the final tab may yet climb higher; in its CER filings Trans Mountain said it would provide a final cost disclosure when it finally comes on stream after May 1.In any event, it will mark a significant milestone for Alberta’s oil producers and the Alberta government, which are expected to reap the benefits of lower price discounts compared to American barrels.In its budget released on Thursday, the Alberta government said it expects the discount for Western Canadian Select (WCS) to gradually shrink to USD$13.60 vis-a-vis West Texas Intermediate by 2026, compared to an actual realized shortfall of $20.77 per barrel in 2023.It all adds up, which means the pipeline could still be viable depending on the final tolling structure that needs to be worked out. Using Alberta’s budget numbers, the added financial benefit from the line — notwithstanding its exorbitant cost — works out to more than $25 million per day, $750 million per month or nearly $10 billion per year. “Additional pipeline capacity is poised to expand market access and bolster Alberta oil prices. There is optimism among Alberta's oil and gas producers, despite political and regulatory uncertainties from the federal government.”
