Kinder Morgan continues to sharpen pencil on Trans Mountain Expansion
In their latest investor presentation, Kinder Morgan says it's still in the process of finalizing cost estimates for its recently approved Trans Mountain Expansion Project (TMEP). The last estimate was provided several years ago, pegging construction costs at $6.8 billion (CAD).
The expansion includes almost 1,000 km of new pipe, 12 new pumping stations, 20 new storage tanks and 3 new berths at the Port of Vancouver. The project will increase pipeline capacity from 300,000 to 890,000 bbl/day and add an extra 630,000 bbl/day of tanker export capacity from BC's Lower Mainland.
The company says it already has 708,000 bbl/day of volumes confirmed under 15/20 year take-or-pay contracts. Kinder Morgan expects to review its commitments with shippers in February and make a final investment decision sometime in the spring. If everything goes according to plan, construction should begin in September and the line will be in-service by the end of 2019.
Kinder Morgan estimates every $100 million increase in capital costs will translate into a $0.07 increase (presumably CAD per m³).
The company's 2017 budget still reflects assumptions a partner will be found to fund 50% of TMEP's costs. No word yet on the estimated value of the divestiture or whether there have been any potential suitors.