CALGARY, Alberta (Reuters) - Kinder Morgan Energy Partners LP KMP.N filed an application on Friday for tolls and contract terms for the proposed $4.1 billion expansion of its Trans Mountain oil pipeline to Canada’s West Coast from Alberta and also named nine energy companies that support the project.
Kinder Morgan stressed that its application to the National Energy Board does not seek approval for the routing and construction of the project, but is designed to provide regulatory and market certainty for the customers that have signed up for 20-year terms.
It expects to apply to build the project, aimed at moving Canadian crude to lucrative Asian markets, in late 2013. The expansion of the pipeline between Edmonton and Vancouver would more than double the line’s capacity to 750,000 barrels a day.
“What this filing today is, is our request to the National Energy Board of approval of commercial terms that underpin the economic viability of the project,” Ian Anderson, president of Kinder Morgan Canada, told reporters.
It means changing the structure of the pipeline’s business to mostly firm, or guaranteed, capacity from being largely a common carrier. Anderson said the expanded line would have about 500,000 barrels a day reserved for the firm shippers.
Kinder Morgan identified its commercial supporters as BP Plc (BP.L), Canadian Oil Sands Ltd COS.TO, Devon Energy Corp (DVN.N), Cenovus Energy Inc (CVE.TO), Husky Energy Inc HSE.TO, Statoil (STL.OL), Imperial Oil Ltd (IMO.TO) Nexen Inc NXY.TO, and Tesoro Corp TSO.N.
The expansion is one of two controversial pipeline projects that would move large volumes of oil sands-derived oil to Canada’s West Coast, where it could be shipped across the Pacific. Supporters say the opening of new international markets would help boost returns that are now pressured by a glut of oil supplies in the U.S. Midwest, the traditional destination for most Canadian crude exports.
The expansion of the 1,150 km (715 mile) pipeline would compete with Enbridge Inc’s (ENB.TO) proposed C$5.5 billion ($5.4 billion) Northern Gateway project, now being scrutinized in public hearings. Cenovus and Nexen are among backers of that project as well.
Environmentalists and many British Columbia native groups oppose the pipeline plans, saying they would increase the risks of oil spills on land and in coastal waters.
Kinder Morgan also faces opposition from the Vancouver city council, partly over the increased tanker traffic the expanded capacity would bring to the city’s harbor.
Traffic would increase to 20-25 vessels per month from four or five, Anderson said.
“It still forms a small percentage of port traffic and the pilots and the Chamber of Shipping are all strongly of the view that tanker traffic through the Port of Metro Vancouver can continue to be done safely, and we’ll continue to involve those parties in those conversations,” he added.
Reporting by Jeffrey Jones; Editing by Tim Dobbyn, Sofina Mirza-Reid and Andre Grenon