Sunday , March 7 2021

Canada: Government buys oil pipeline at high price, official report says

The Canadian government of Justin Trudeau paid a heavy price by nationalizing the controversial Trans Mountain pipeline last year, worth $ 4.4 billion, according to a report by a verification agency. public accounts released Thursday.

Facing bottlenecks in Canada's oil pipelines and oil industry uncertainty in August 2018, Ottawa purchased the American Kinder Morgan pipeline linking the Alberta oil fields to the Pacific coast through the Rocky Mountains.

With 1,200 km of extension, and currently saturated, capacity should be tripled to 890,000 barrels of oil per day, according to an expansion project. However, work has been slow to start due to a court ruling and strong opposition from a part of the population of western Canada.

In its report "The Trans Mountain Channel of Canada: Financial and Economic Considerations," the Office of the Parliamentary Budget Director (PBO, an independent public official who provides Parliament with a permanent audit of public accounts) estimates that the value of the pipeline is between "US $ 3.6 billion and US $ 4.6 billion".

"The Canadian government paid $ 4.4 billion, which is in the pipeline's highest value range, according to our analysis," said PBO Yves Giroux.

The expansion was valued at Cdn $ 7.4 billion in 2016, excluding the purchase of the existing pipeline, but the PBO estimates that the new pipeline "would cost $ 9.3 billion to build and enter service on December 31, 2021" .

By the end of August 2018, the Canadian judicial system had forwarded this project, which was strategic to the Trudeau government, claiming that it had not sufficiently taken into account the fears of indigenous groups in the region, its environmental consequences, in particular marine fauna.

Ottawa announced in October that it would again consult the Aboriginal communities concerned, hoping to resume work quickly.

"Any delay in construction or any increase in costs will have a negative impact on the value of the pipeline," the PBO said.

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