(Bloomberg) -- The Canadian government-owned company expanding the country’s only oil pipeline to the Pacific Ocean may be unable to fund the rest of the project, the government’s auditor general said, just months before the project is scheduled to start operation.
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Trans Mountain Corp. would need to obtain external financing since the federal government said in February 2022 that no more public money would be spent on the project, the auditor said. The expansion would nearly triple the capacity of the system by twinning the 1950s-era line that runs from Alberta to the Vancouver area.
“If the corporation cannot finance the full remaining construction of the pipeline expansion, it will be unable to put the expanded pipeline into service to generate revenue,” the Office of the Auditor General of Canada said in a commentary. “The Trans Mountain Corporation’s year-end financial statements disclosed a significant uncertainty about the Crown corporation’s ability to continue operating.”
Prime Minister Justin Trudeau’s government bought Trans Mountain in 2018 from Kinder Morgan Inc., which had threatened to scrap the expansion project amid fierce opposition in British Columbia. The project is years behind schedule as construction delays, worker fatalities, floods and the pandemic caused its price tag has more than quadruple to C$30.9 billion ($22.5 billion). The expanded pipeline is scheduled to start operation at the end of the first quarter of 2024.
Trans Mountain had a syndicated credit agreement with combined available credit of C$16 billion as of July 20.
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