Cost of Trans Mountain expansion soars to $12.6B

Trans Mountain CEO Ian Anderson announced Friday that the cost of building the pipeline expansion has soared from an initial estimate of $7.4 billion to $12.6 billion.

In a conference call with reporters, Anderson said increased material and labour costs are to blame for the cost overruns, along with years-long legal troubles and renewed Indigenous consultation efforts that also added to the final total.

Despite the sizeable increase from the initial 2017 cost estimate, Anderson said the project will be profitable because much of its capacity has already been sold to major oil producers like Suncor and Cenvous on 20-year contracts. He said the project will generate $1.5 billion a year in cash flow when it’s fully operational.