Financial centre of oilpatch hails approval of Trans Mountain expansion, Line 3

CALGARY – The financial centre of the oilpatch applauded Ottawa’s approval of two massive pipeline developments, saying the decisions send a message that Canada is open to investment at a time when the economy sorely needs it.

For months, the energy sector had waited with bated breath for federal pronouncement on three projects: Kinder Morgan’s Trans Mountain expansion and Enbridge’s Northern Gateway and Line 3.

On Tuesday, Prime Minister Justin Trudeau responded, rejecting Northern Gateway while sanctioning the other two proposals.

“This is a defining moment for our project and Canada’s energy industry,” Ian Anderson, president of Kinder Morgan Canada, said in a news release.

The $6.8-billion Trans Mountain expansion would see the capacity of a pipeline that runs from the Edmonton area to Burnaby, B.C., nearly triple, to 890,000 barrels per day.

Trudeau also announced the approval of the Line 3 replacement project, which would see that pipeline roughly double its current output to 760,000 barrels per day.

When combined with the Trans Mountain expansion, Trudeau gave the green light to close to a million barrels of crude a day in one fell swoop.

“This is exactly the good news the Albertan and Canadian economies need right now,” Calgary Chamber CEO Adam Legge said in a statement.

“This is a signal that Canada is open for business and for investment. This will have positive impacts throughout the petroleum value chain. When producers are more certain they will be able to get their products to market, they are also more likely to make investment.”

For Enbridge, Trudeau’s announcement was a mixed blessing. The Calgary-based energy giant said it was pleased with the government’s approval of Line 3 but disappointed with its dismissal of Northern Gateway.

Northern Gateway would have shipped up to 525,000 barrels of crude per day from the Edmonton area to Kitimat, B.C., for export to Asian markets. Trudeau had telegraphed well in advance his opposition to the project, and on Tuesday he made it formal.

“Given today’s decision, we’ll need to assess our alternatives, which we’ll do in consultation with our partners, including our aboriginal equity partners,” Enbridge said in a statement.