CALGARY – The Trans Mountain Expansion Project is accelerating with work well underway with pipe in the ground and terminal construction in Alberta. Before the end of 2020, construction is expected to be underway across the entire line.
“We have more than 2,900 people working on the project and that number will grow significantly in the months ahead,” said Ian Anderson, president and CEO of Trans Mountain Corporation Friday in media release.
“With 65 per cent of the detailed route approved, and a process established by the Canada Energy Regulator for the remainder in progress, the path forward is clear. Construction is accelerating.”
The Trans Mountain Corporation Board of Directors recently approved a Project cost estimate of $12.6 billion to bring it into service by the end of 2022. To date, the company has spent $2.5 billion on the project, which includes the impact of delays and the resulting additional regulatory process.
It’s anticipated that an additional $8.4 billion will be spent to complete the project, plus $1.7 billion of financial carrying costs. The company has also recommended to the Government of Canada in its capacity as owner and lender, a further $600 million reserve for cost impacts beyond the control of Trans Mountain. This added cost of the expansion is due to enhanced environmental protections, security, quality assurance and Indigenous inclusion, and is based on reasonable assumptions, including the completion of regulatory approvals, permits and route hearings.
The corporation’s projected earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to be at least $1.5 billion in the first year of the Project’s operation and expected to grow annually. These projections are underpinned by long-term contractual commitments covering 80 per cent of the system’s 890,000 barrels a day of capacity.
The project is also expected to drive significant economic benefits for workers, businesses and Indigenous communities across Alberta, B.C. and the country.
At peak construction, there will be about 5,500 workers employed in communities along the construction corridor in Alberta and B.C. Trans Mountain is prioritizing and maximizing Indigenous, local and regional hiring to the greatest extent possible.
Communities along the construction corridor will benefit from significant tax dollars, which are anticipated to exceed $52 million annually, contributing to these local communities’ ability to meet their respective social, economic and development goals.
“Today’s Trans Mountain Expansion Project has seen significant changes, enhancements and improvements since it was originally envisioned in 2009, and first introduced to the public in 2012,” said Anderson.
“The Project has set new standards for Indigenous participation and inclusion – with 58 signed agreements worth over $500 million. The project reflects the input and feedback from thousands of Canadians and incorporates the very best safety and environmental protections.
Canadians will benefit from the economic and tax contributions made by the project once it is operation. In addition, Trans Mountain will make payments to the B.C. government of between $25 million and $50 million annually, for a total contribution over a 20-year period of up to $1 billion. These funds are to be used by the B.C. Clean Communities program to fund local, environmental projects everywhere in British Columbia.