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Another setback in the expansion of the Trans Mountain pipeline

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A pipeline segment is lowered into the Coquihalla River by Trans Mountain near Hope, British Columbia, August 9, 2022

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The Canada Energy Regulator on Tuesday rejected the request for an exemption from the state-owned company that owns the Trans Mountain pipeline for a section of the route under construction in British Columbia.

The decision could cause delays in the completion of the project.

Trans Mountain wanted to be able to use a smaller diameter of pipeline for a 2.3 km section, due to the hardness of the rock in the mountainous area between Hope and Chilliwack which produces more difficult drilling conditions.

According to Trans Mountain, attempting drilling with a larger diameter would produce unpredictable results.

The Canada Energy Regulator says that the reasons for refusal will be revealed as soon as possible and that the decision was published without explanations, because Trans Mountain had requested an accelerated process.

At a hearing on November 27, Trans Mountain representatives said installing a smaller pipe would allow save 59 construction days and keep the completion date in the first quarter of 2024.

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The refusal is another setback in a series of failures. pitfalls for the expansion project intended to triple crude oil shipments from Alberta to the West Coast at a rate of 890,000 barrels per day. The Crown corporation is racing against time to meet its schedule to limit additional construction costs and monthly revenue losses of $200 million if the pipeline does not come into operation on the targeted date. .

Calgary oil market players have also declared that the regulator's decision contributed to the widening of the discount on Canadian crude oil compared to US benchmark crude oil.

With information from Reuters

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