Canada Regulator Clears Latest Trans Mountain Pipeline Delay of Environmental or Safety Concerns

(Reuters) — The Canada Energy Regulator (CER) said on Wednesday that it has not noted any environmental or safety concerns with the latest construction challenges to plague the Trans Mountain pipeline expansion.

Earlier this week Trans Mountain TMC.UL said it had run into technical issues and faces new delays as it tries to complete the final leg of the C$30.9 billion ($23.00 billion) oil pipeline project, which is already years behind schedule and running at more than four times its original budget.

The Canadian-government-owned corporation ran into difficulties while installing a section of pipeline through a mountain in British Columbia, known as the Mountain 3 crossing.

The CER said it has inspection officers and Indigenous monitors currently on site as part of standard compliance activities.

"No safety or environmental concerns have been noted, and we will continue to monitor the situation," the regulator said in a statement.

Trans Mountain had expected to complete the Mountain 3 crossing this week and start pipeline operations in April. News of the latest setback pushed Canadian crude prices lower.

Oil industry participants are awaiting further information on how serious the technical issues are. Trans Mountain expects the expanded pipeline, which will nearly treble the flow of oil from Alberta to Canada's Pacific Coast to 890,000 barrels per day, will start shipping in the second quarter.

The CER also released its reasons for approving on Jan. 12 a variance request from Trans Mountain to install a smaller-diameter pipe in the Mountain 3 crossing, after denying the same request in December.

The regulator said it decided the variance was in the public interest after Trans Mountain made new commitments around pipeline inspections and demonstrated it would use effective quality management processes to procure materials to build the Mountain 3 crossing.

($1 = 1.3433 Canadian dollars)

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