Oil producers Canadian Natural, MEG urge regulator to back Trans Mountain request

Canada Energy Partners

27/12/2023 16:42

By Rod Nickel
       WINNIPEG, Manitoba, Dec 27 (Reuters) - Canadian oil
producers Canadian Natural Resources  CNQ.TO  and MEG Energy
 MEG.TO  are urging the country's energy regulator to approve
Trans Mountain Corp's  TMC.UL  latest request for a change to
building its pipeline expansion, saying timely completion is
critical.
    Canadian Natural and MEG hold long-term contracts to ship
crude on the Canadian government-owned Trans Mountain from
Alberta to the British Columbia coast. 
    The long-delayed expansion will nearly triple crude
shipments to 890,000 barrels per day once it starts operating,
expected by late in the first quarter 2024. Delay risks have
pressured Canadian crude prices in recent months. 
    "If the application is not approved, Canadian Natural and
other shippers and in fact the entire energy industry and the
governments of Canada and Alberta stand to incur significant
losses caused by a delay of up to two years," Canadian Natural
President Tim McKay wrote on Dec. 22 to the Canada Energy
Regulator (CER).
    Canadian Natural is Canada's biggest oil producer and has
committed to shipping 94,000 barrels per day for 20 years on
Trans Mountain, representing 10% of the expanded pipeline's
capacity, McKay said.    
    Trans Mountain asked the CER's permission to install
smaller-diameter pipe in a 1.4-mile (2.3-km) section of the
pipeline's route after encountering challenging drilling
conditions in a mountainous area between Hope and Chilliwack,
British Columbia.
    The CER denied that request Dec. 5. Trans Mountain then
asked the regulator to reverse its decision by Jan. 9, warning
of a "catastrophic" two-year delay and billions of dollars in
losses.
    The CER last week denied Trans Mountain's variance request,
citing concerns about pipeline integrity and the environment. It
is reviewing Trans Mountain's latest application.
    In a Dec. 24 letter, Tim Takaro, Simon Fraser University
professor emeritus of health sciences who has protested the
project, urged the CER to take more time to make its decision.
He cited risks of any pipeline leak to destroying
salmon-spawning grounds in the Fraser River and to shutting down
a nearby national highway.

 (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by
David Gregorio)
 ((rod.nickel@tr.com; X: @RodNickel_Rtrs;))