Kinder Morgan says Trans Mountain project could be a year behind schedule

CALGARY — Kinder Morgan Canada Ltd. said Wednesday that the Trans Mountain pipeline expansion project could be a year behind schedule as it continues to encounter permitting delays.

The estimate is three months further behind from the company’s last estimate in December, and now potentially puts the $7.4-billion project in service by Dec. 2020 depending on regulatory, permit and legal approvals.

Calgary-based Kinder Morgan Canada (TSX:KML) said it has scaled back spending in 2018 to focus on securing needed final approvals for the project, which faces significant opposition from numerous Indigenous groups, environmentalists and municipalities in British Columbia.

Steven Kean, chief executive of American parent company Kinder Morgan, said on an investor call that the company will hold back on major construction spending until it has more confidence in the reliability and timing for getting permits for the project that would close to triple the capacity of the Trans Mountain system.

“We’re not going to get all the permits before we would begin construction, but we do need to see that there’s a process in place and we can count on it.”

The company scored a victory for its project in early December when the National Energy Board ruled in its favour, allowing it to bypass some bylaws in Burnaby, B.C., that were found to be obstructing the project.

The regulator has not, however, made a decision on establishing a process to deal with potential future permitting delays for the project, as requested by the company.

Kinder Morgan Canada repeated in its earnings results that if the project continues to face unreasonable regulatory risk the company may not be able to proceed with the project, but Kean downplayed the chances on the call.

“We don’t expect to find ourselves in an untenable position, but we’ve made that point in the filings seeking the relief that we’ve asked for from the regulator — and so we’ve said the same thing to our investors that we said to the regulator.”

Kinder Morgan Canada, which also operates the existing Trans Mountain pipeline as well as other oil and gas transportation and infrastructure, reported net income of $46.4 million for the three months ending Dec. 31, up from $17.8 million a year earlier.

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