Enbridge Inc T.ENB.PR.Y

ENB's existing pipelines created a wide moat

[ckwong]

Canada-owned Trans Mountain oil pipeline not profitable after higher costs: budget officer

UPDATE 2-Canada-owned Trans Mountain oil pipeline not profitable after higher costs: budget officer

 

06/22/22 - 11:09 AM ET - Reuters

(Adds further detail from report, environmentalist comment, file photos)

By Rod Nickel and Ismail Shakil

June 22 (Reuters) - The Canadian government-owned Trans Mountain oil pipeline is no longer profitable after cost over-runs and delays to its expansion project, the country’s parliamentary budget officer (PBO) said on Wednesday.

A report from PBO Yves Giroux said the pipeline has a net present value of negative C$600 million ($463.03 million), based on the difference between Trans Mountain’s cash flows and its C$4.4 billion purchase price.

The report from the PBO, which provides independent advice to Parliament, is a blow to Prime Minister Justin Trudeau, whose government bought the pipeline in 2018 to ensure that the expansion proceeded despite protests. Expansion of other pipelines, notably Enbridge Inc’s Line 3 to U.S. Midwest refiners, has since smoothed the flow of crude, one of Canada’s most valuable exports.

Trudeau has faced criticism that expanding the pipeline is contrary to Canada’s goals of cutting greenhouse gas emissions.

Spokespersons for Canada’s finance ministry could not be immediately reached. Trudeau’s government has long said it plans to sell the pipeline once the expansion is complete.

The pipeline moves up to 300,000 barrels per day of oil from near Edmonton, Alberta to the Pacific coast in British Columbia, and the expansion would nearly triple capacity.

Additional delays and increased construction costs would further reduce Trans Mountain’s value, the PBO said.

If Ottawa chose to cancel the expansion, the government faces a C$14.4 billion write-off, the PBO said.

The government should do exactly that to cut its losses, said Julia Levin, national climate program manager at Environmental Defence.

"Continuing to throw public dollars at the project would be another broken promise from a government that committed to end fossil fuel subsidies," she said.

The cost of expanding Trans Mountain has jumped to C$21.4 billion from C$12.6 billion, and its in-service date delayed by nine months to late 2023, Trans Mountain Corp said in February. ($1 = 1.2958 Canadian dollars)

(Reporting by Rod Nickel and Ismail Shakil; additional reporting by Steve Scherer in Ottawa; Editing by Chizu Nomiyama and Nick Zieminski)

 

[bttmfischer]

How can this be a surprise? a) Was there EVER A  BUSINESS in which a liberal government were involved, profitable?         I am totally unaware of any such endeavour, but I would love to hear a credible example; b) What the devil is the"NATIONAL CLIMATE PROGRAM" that has a manger?      Is this some kind of suggestion that this "manager"

[CanaanR]

This post has been removed in accordance with Community Policy

[Jtpatrol1]

  This John trevor plows has a lot of "issues"  thats for sure

[bttmfischer]

Is this a freshman's joke in poor taste? To me it looks like a cut-and -paste effort. Nevertheless, we all have opinions much the same way as we have bellybottons, even though we may have a different appearance. Other than that, to me it looks like some posters here have nothing else to do except to post things that are irrelevant., and not worth reading. I must also say that I certainly didn&