(Adds TC Energy comment)
By Nia Williams
June 16 (Reuters) - The Canada Energy Regulator (CER) has raised the cost estimate for abandoning the pipelines it regulates by 79% to C$18.6 billion ($14.10 billion), and said most companies will need to put more money toward taking the oil and gas infrastructure out of service.
Pipeline abandonment costs are reviewed every five years, and the steep increase from a C$10.4 billion estimate in 2019 is due to inflation, changes to company-owned infrastructure and updated abandonment assumptions, the regulator said in a statement released on Thursday.
"This will enhance our ability to ensure that pipelines are safely abandoned while safeguarding the environment and surrounding communities," the CER said.
Most of the 93 companies whose Canadian pipelines are regulated by the CER will face higher abandonment costs, the regulator said.
The C$18.6 billion figure is a preliminary estimate. The final amount will be confirmed in the second part of the review process when companies and other stakeholders can ask for changes to the cost estimates for particular pipelines.
The CER regulates all pipelines that cross provincial boundaries or the U.S.-Canada border, amounting to roughly 73,000 kilometers, or 10% of all pipelines in the country. Major operators include Enbridge Inc and TC Energy.
An Enbridge spokesperson said the revision will impact how much the company sets aside for abandonment costs.
"We have not yet determined whether we will request any changes to the estimates," she added.
TC Energy said in a statement its pipelines go through a robust regulatory process when they are taken out of service.
Abandonment involves permanently removing a pipeline from service, by emptying it of fluids, conducting inspections and when necessary, cutting, capping and filling it with materials like concrete.
Companies must gradually accumulate the funds in a dedicated trust by the end of 2054 or earlier, or post a financial guarantee, essentially an agreement with a third party to cover the cost of abandonment if the company cannot pay. ($1 = 1.3188 Canadian dollars) (Reporting by Nia Williams; editing by David Evans, Leslie Adler and Deepa Babington)