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British Columbia approves Trans Mountain expansion

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World Pipelines,

The provincial government of British Columbia (BC) have given their environmental approval for the proposed expansion of Kinder Morgan’s Trans Mountain oil pipeline. The company plans to triple the existing pipeline’s capacity to 890 000 bpd of crude oil, and has promised to share a proportion of the spoils with the province.

This recent approval could represent the final regulatory hurdle for the multibillion-dollar project, which is expected to increase Canada’s crude exports to Asia, thus reducing its dependence on the US. According to the Wall Street Journal, the total cost of the project is approximately CAN$5.5 billion.

BC’s Premier, Christy Clark, is reported to have said in a statement that the project had satisfied, or was close to satisfying, the five conditions (covering matters related to the environment, aboriginal communities and economic benefits) that she laid out to pipeline companies in 2012. Clark’s statement also highlighted that the government has granted 37 conditions along with the environmental assessment certificate.

With this environmental approval, only two more Trans Mountain approvals were outstanding. The province needed to get a ‘fair share’ of jobs and economic benefit from the pipeline and a marine response plan to oil spills must be provided.

Regarding the former, Clark has stated that BC has struck an agreement with Kinder Morgan under which the company would pay it up to CAN$1 billion over a 20 year period as part of a revenue-sharing agreement.

According to Bloomberg, Clark told a news conference in Victoria: "Every penny of that will go into environmental protection.”

Environmental groups were swift to criticise BC’s approval of the project. The project has faced extensive opposition from both environmentalists and indigenous groups since it was first proposed over four years ago. The Canadian Prime Minister, Justin Trudeau, announced his approval of the expansion project in November.

Ian Anderson, President of Kinder Morgan’s Canadian unit, stated that BC’s approval “represents a positive outcome for our company, customers and for British Columbians and all Canadians who will benefit from the construction and operation of an expanded pipeline.”

While the project still requires final approval from Kinder Morgan’s board of directors, the company plans to commence construction in September of this year.

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