(Adds cost details, background on pipeline)
By Nia Williams
March 10 (Reuters) - The cost of the Canadian
government-owned Trans Mountain oil pipeline expansion has
jumped to C$30.9 billion ($22.35 billion), the federal
corporation building the project said on Friday, a 44% increase
on the previous estimate.
Trans Mountain Corp (TMC) said it is in the process of
securing external financing to fund the remaining cost of the
project, which is now expected to start shipping oil in the
first quarter of 2024.
The 590,000 barrel-per-day pipeline expansion will
nearly triple the flow of barrels from Alberta's oil sands to
Canada's Pacific coast, opening up access to Asian markets, but
has been beset by regulatory delays, environmental opposition
and hefty budget overruns.
Last February TMC increased the cost estimate to C$21.4
billion, up from C$12.6 billion in 2020 and C$7.4 billion in
2017. Following last year's jump, the Canadian government said
it would halt any further public funding for the project.
TMC blamed the increase on a number of factors including
high global inflation and supply chain issues, floods in British
Columbia, unexpected major archaeological discoveries and
challenging terrain.
The corporation also said the current cost estimate does
not include reserves for "extraordinary risks" and could change
again.
"As with all projects of this size, risks to the final
costs and schedule will remain as work is completed through
2023," TMC said in a statement.
(Reporting by Nia Williams in British Columbia and Rahul Paswan
in Bengaluru; Editing by Leslie Adler and Grant McCool)
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