Canada's Trans Mountain oil pipeline will rely heavily on last-minute shippers to turn a profit, the corporation's financial projections show, clouding...
- Canada 's Trans Mountain oil pipeline will rely heavily on last-minute shippers to turn a profit, the corporation's financial projections show, clouding Ottawa 's efforts to sell the pipeline now that its C$34.2 billion expansion is finished after years of delays.
In a scenario with zero spot shipments, the pipeline would not generate positive equity return - earnings after depreciation, interest and taxes are subtracted - until 2031. If, as Trans Mountain forecasts, the pipe runs 96% full from next year, equity return turns positive in 2026. One Canadian crude trader said spot demand for Trans Mountain would depend on how full rival pipelines are.
One mountainous segment soared from an estimated C$377 million in 2017 to C$4.6 billion in 2023 after hitting technical difficulties. Other segments passing through Metro Vancouver jumped from C$310 million to C$1.7 billion over the same period.Prime Minister Justin Trudeau's government bought Trans Mountain in 2018 to ensure the expansion, which has nearly tripled shipping capacity from Alberta to the Pacific coast, proceeded.
"If you're trying to sell something, and you have uncertainties, it's going to affect the value someone's going to pay for it," Maki said. "If this was not a government-owned entity the market would have a really hard time supporting it. Those leverage ratios are like junk," Ellis said.
Stephen Ellis Financial Projections Canada Ottawa Mark Maki Keystone Pipeline Shippers
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