Kinder Morgan further delays Canada Trans Mountain oil pipeline

(Reuters) - Kinder Morgan Canada said on Wednesday that the start-up of its Canadian Trans Mountain oil pipeline expansion would be delayed by three months to December 2020, marking the latest setback to a project facing fierce local opposition.

Trans Mountain originally had an operational date of December 2019, but the company in October pushed that back to September 2020 because of difficulty in obtaining permits.

The company is focusing on gaining permit approvals, and is holding off on starting full construction of the C$7.4 billion ($5.95 billion) project, Chief Executive Steve Kean said.

“What we’re doing here is all the right things,” Kean said on a conference call with analysts about quarterly results. “We are being careful stewards of our capital and we’re doing everything we can to get the clarity we need to proceed.”

The proposed pipeline expansion from Canada’s oil-rich Alberta province to the British Columbia coast would nearly triple its capacity to 890,000 barrels per day.

Canadian oil producers, whose landlocked product trades at a discount to the West Texas Intermediate benchmark, say they need additional pipeline capacity to fetch better prices.

But Trans Mountain faces opposition from some municipalities along the pipeline’s route, certain aboriginal groups and environmental activists. Concerns range from potential spills to providing an outlet for Alberta’s oil sands, which some consider a dirtier form of extracting oil than conventional means.

Last month, Canada’s energy regulator ruled in favor of the company’s appeal to sidestep some municipal permits for the pipeline.

Kinder Morgan Canada was spun off from Houston-based Kinder Morgan Inc last May.

Kinder Morgan Canada shares closed up 0.2 percent, or 4 Canadian cents, at C$16.75 in Toronto.

Reporting by John Benny in Bengaluru and Rod Nickel in Calgary, Alberta; Editing by Maju Samuel and Peter Cooney

SOURCE: REUTERS