An expanded oil pipeline will enable Canada to distribute its oil to new customers in Asia, including Japan, China and India. The Trans Mountain pipeline spans 773 miles, and the expansion has cost the government a staggering £14billion.
This substantial investment is predicted to yield significant returns for the country as it aims to diversify its markets for oil products. The oil and gas industry represents approximately 5% of Canada’s GDP. A massive 95% of the oil is produced in Alberta, located in western Canada. Every day, millions of barrels of oil are extracted from the oil sands in the state.
Until now, 98% of the oil has been destined for the US. Supporters of the pipeline construction argue that reliance on a single market has suppressed Canadian crude prices for years. And the new Trump administration, which is waging a trade war, is likely to work as a further push to diversify the market.
Canada has long sought to transport its oil to Asia, where there is an increasing demand for energy products.
However, Alberta’s central location means it is hundreds of miles away from either coast in the country.
The original Trans Mountain pipeline, constructed in 1953, was the sole pipeline transporting oil from Alberta to the west coast.
Therefore, in 2013, energy company Kinder Morgan submitted an application to increase its capacity.
Initially, the project was anticipated to cost nearly £2.2billion, but was delayed due to strong opposition from environmental and Indigenous groups.
In 2018, the Canadian government had to intervene and complete the project, purchasing the pipeline from Kinder Morgan. The project was ambitious, with the goal of opening up new markets in Japan, India, and China by transporting more oil to a newly expanded Westridge Marine Terminal, near Vancouver.
It included nearly 120 miles of reactivated pipeline, 19 new storage tanks, and three new shipping berths. The objective was to triple the pipeline’s capacity to transport almost 900,000 barrels a day.
Ultimately, it cost the government over six times the initial estimate to construct. According to the Bank of Canada, the expansion is anticipated to contribute 0.25% to the country’s GDP.