April 18, 2019 / 1:42 PM / a month ago

Canada extends deadline for Trans Mountain pipeline decision to June 18

CALGARY, Alberta (Reuters) - Canada has extended the deadline for a decision on whether to push forward with the expansion of the Trans Mountain oil pipeline to June 18 from mid-May, the government said on Thursday.

FILE PHOTO - Steel pipe to be used in the oil pipeline construction of Kinder Morgan Canada's Trans Mountain Expansion Project sit on rail cars at a stockpile site in Kamloops, British Columbia, Canada May 29, 2018. REUTERS/Dennis Owen

The Trans Mountain expansion (TMX) project would nearly triple the amount of crude flowing from Alberta’s oil sands to British Columbia’s coast, but has been beset by regulatory delays and opposition from indigenous groups, environmentalists and the government of British Columbia.

Amarjeet Sohi, Canada’s minister of natural resources, said the delay would give the federal Liberal government more time to consult with indigenous groups impacted by the pipeline.

“The Government has consistently said that a decision would only be made on the project once we are satisfied that the duty to consult has been met,” he said.

However, Conservative shadow minister for natural resource Shannon Stubbs said the delay meant another summer construction season would likely be missed.

“There is also still a very real risk that the Liberals will cancel this project for political reasons,” she said in a statement.

Last August, the Canadian government bought the pipeline from Kinder Morgan Canada for C$4.5 billion ($3.37 billion) to ensure it gets built.

That came after Canada’s Federal Court of Appeal overturned the Liberal government’s 2016 approval to expand the pipeline. The court ruled Canada’s National Energy Board (NEB) regulator had not considered marine impacts and the government had not adequately consulted indigenous groups.

Prime Minister Justin Trudeau’s government ordered a new NEB review of Trans Mountain last September, and in February the regulator recommended the government approve it a second time.

The NEB also made new recommendations to mitigate harm to Pacific Ocean killer whales, which environmentalists warn will face disruption from increased oil tanker traffic.

Alberta’s Premier-designate Jason Kenney, who won a landslide election victory in the oil-rich province on Tuesday, said he had spoken with Trudeau about the delay.

“I agree with the Prime Minister that they need to make sure they cross every ‘t’ and dot every ‘i’ when it comes to discharging the federal government’s duty to consult,” Kenney told a news conference. “We certainly do not want them to go back to the drawing board a third time on this.”

RBC Capital Markets analyst Michael Tran said the short delay to the decision would not materially impact the energy sector.

“The government is taking its time to make sure the right decision is made and it’s communicated the right way to the masses,” Tran said.

Trudeau’s Liberals face a federal election later this year in which the environment and pipelines will be major issues.

($1 = 1.3363 Canadian dollars)

Additional reporting by Steve Scherer in Ottawa; Editing by Bernadette Baum, Marguerita Choy and Jonathan Oatis

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