Canada’s Pipe Dream Marred as Overruns Drive Up Cost of Exporting Oil to Asia

Trans Mountain’s proposed tolls reflect soaring expansion cost
Analysts see hefty writedown since tolls won’t cover expansion

Construction on the Trans Mountain Pipeline expansion project at the Burnaby Terminal tank farm in British Columbia, on March 27.Photographer: Darryl Dyck/Bloomberg

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By Sheela Tobben and Robert Tuttle

July 11, 2023 at 12:00 PM UTC

Updated on

July 11, 2023 at 3:08 PM UTC

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A Canadian pipeline hailed as a cheap and speedy way to send oil to Asia is set to become a $15 billion (C$20 billion) taxpayers’ headache and an expensive option for exporters thanks to cost overruns.

The expanded Trans Mountain Pipeline will enter service early next year after nearly tripling its capacity, delivering an extra 590,000 barrels of Alberta oil each day to Vancouver. Its route cuts the time to ship Canadian crude to Asia by roughly two-thirds compared to sending via the US Gulf, but it won’t necessarily be more cost effective.