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It's opening day for the $34 billion Trans Mountain oil pipeline expansion

Wednesday marks a monumental day as the highly anticipated $34 billion Trans Mountain oil pipeline expansion project officially commences. The Crown corporation behind the endeavor, Trans Mountain Corp., has confirmed that starting today, the expanded pipeline stretching from Alberta to the B.C. coast will be actively transporting crude oil.

This extensive project involved the twinning of an existing pipeline, a feat that has taken over four years to complete and stands as one of Canada's most expensive infrastructure ventures to date. By increasing the Trans Mountain system's shipping capacity from 300,000 barrels per day to an impressive 890,000 barrels per day, this expansion is poised to facilitate access to global export markets for Canadian oil producers.

The heightened capacity is anticipated to positively impact the revenue of Canadian oil companies by enhancing the price they receive for their product. However, despite the project's completion, uncertainties persist due to the federal government's expressed intention to divest from ownership of the pipeline.

Initially acquired for $4.5 billion in 2018 to ensure project completion, the government now seeks to offload its ownership, likely incurring a substantial loss given the project's escalating costs during construction.

Meanwhile, companies utilizing the Trans Mountain pipeline are now subject to the revised tariffs and tolls associated with the expanded system. Nonetheless, a dispute has arisen between Trans Mountain and its oil company customers regarding these increased fees.

Trans Mountain attributes the elevated charges to budget overruns, citing factors such as the COVID-19 pandemic, adverse weather conditions, and the necessity to navigate archeologically significant sites along the pipeline route. As negotiations unfold, stakeholders eagerly await resolution while the pipeline's expanded capacity promises a new era for Canadian oil transportation.



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