Ottawa may not want to get out of the pipeline business just yet: Trans Mountain CEO

Calgary Herald

02-05-2025

Ottawa has long said it intends to sell its $34-billion Trans Mountain pipeline to the West Coast, but the head of the Crown corporation that owns it says the federal government may not want to get out of the pipeline business just yet, particularly if it decides it shouldn't be the last oil export pipeline built in Canada.
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'If there is another pipeline to be built, and private capital won't do it, with Trans Mountain, (Ottawa) can ring the bell and say, 'You guys get this done,'' Trans Mountain Corp. chief executive Mark Maki said.
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But he said he didn't know if the new government under Prime Minister Mark Carney would deviate from previous plans to sell the Crown corporation that owns and operates the expanded 890,000-barrel-per-day pipeline, which just finished its first full year of operations.
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'It's very possible. We're going to have to see. But taking (Carney's) words at face value, the desire to have Canada be an energy superpower, for sure (it's possible),' he said. 'Canada does have a big, natural resource-based economy, so we should take advantage of that and Trans Mountain can be a piece of that if the government wants it to be.'
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The Trans Mountain expansion (TMX) project took more than a decade to build, and its price ballooned to more than $34 billion from an estimate of $5.4 billion when it was first proposed by Kinder Morgan Inc. in 2013.
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But as it marks one year of commercial operations this week, TMX's proponents say they finally have the receipts to counter critics who have argued that Ottawa made an expensive mistake when it decided to buy the pipeline project after Kinder Morgan walked away in 2019 — underscored, Maki says, by Canada's now urgent need to diversify its trade away from the United States following President Donald Trump 's economic and annexation threats against Canada.
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At its startup on May 1, 2024, TMX added 590,000 barrels per day in export capacity and for the first time provided Canada meaningful access to international crude markets, especially Asia, according to a recent analysis by S&P Global Commodity Insights.
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That access to new markets and the additional pipeline capacity, analysts say, has been key to stabilizing prices for Canada's benchmark heavy crude, Western Canadian Select (WCS), and increasing returns for producers and taxes and royalties for governments.
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WCS, which is a heavy oil with a higher sulphur content, is considered a lower-quality crude and it trades at a discount to light oils such as West Texas Intermediate (WTI). For much of the previous decade, whenever Canadian production would outstrip export pipeline capacity, there would be a glut of landlocked heavy barrels in Western Canada that would lead to prices cratering.
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But since TMX entered service early in 2024, the WCS-WTI differential has fluctuated in a relatively tight band between $12.50 and $16.50 per barrel, even as Canadian production has risen to new records, according to S&P Global Commodity Insights, compared to $18/bbl for much of the last decade.