Exclusive: Canada's Trans Mountain pipeline lowers forecasts for amount of oil it ships

Amanda Stephenson - Reuters - 03/04
Canada's Trans Mountain oil pipeline has downgraded forecasts for the amount of oil expected to flow through its system over the next three years, documents filed by the operator show, as use of the newly expanded pipeline increases more slowly than expected.
  • Construction cost overruns boosted fees for shipping oil on line
  • Regulators will hold hearing on whether higher costs are fair
  • Potential US tariffs may still boost Trans-Mountain's appeal
CALGARY, April 2 (Reuters) - Canada's Trans Mountain oil pipeline has downgraded forecasts for the amount of oil expected to flow through its system over the next three years, documents filed by the operator show, as use of the newly expanded pipeline increases more slowly than expected.
The lower forecasts, filed by Trans Mountain with the Canada Energy Regulator last month, have not been previously reported. They indicate unwillingness by oil companies to pay higher tolls the government-owned Trans Mountain has been charging customers to ship oil on the newly expanded pipeline, analysts said.

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They said 20% of the pipeline's capacity that is reserved for spot shipments is being underutilized because shipping costs are higher than the Enbridge Mainline system, the largest crude pipeline system in North America, which moves oil from western Canada to markets in Eastern Canada and the U.S. Midwest.
The lower forecasts raise questions about the Trans Mountain pipeline's ability to generate revenue and attract a private sector buyer. Ottawa has indicated it ultimately wishes to sell the pipeline.
Lower expected usage also shows the difficulty of diversifying Canadian oil exports away from the U.S., which buys 90% of Canadian crude. Trans Mountain is Canada's only operational east-west pipeline and the only outlet to Asia and non-U.S. markets. One possible wild card: analysts and Trans Mountain itself have said business could improve quickly if U.S. President Donald...
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