Canada's Finance Ministry announced on Wednesday the federal government is providing a loan guarantee on behalf of the Trans Mountain Corporation which has secured enough funds to finish the construction of a pipeline expansion project to export more Canadian crude oil.
According to a statement, the corporation has secured up to 10 billion Canadian dollars (8 billion U.S. dollars) in third-party financing with a group of Canadian financial institutions, which will be used to fund the project's construction costs.
The financing will not change the cost estimate of 21.4 billion Canadian dollars (17.1 billion U.S. dollars) and 2023 completion date outlined in February, the statement said.
On Feb. 18 this year, the federal government provided an update on the Trans Mountain Expansion Project. With 50 percent of the pipeline already built, the federal government announced that no additional public money would be spent on the project and Trans Mountain Corporation would secure the funding necessary to complete the project with third-party financing.
The original Trans Mountain Pipeline was built in 1953 and continues to operate today. The expansion project is essentially a twinning of this existing 1,150-kilometre pipeline between Strathcona County (near Edmonton), Alberta and Burnaby, British Columbia.
It will create a pipeline system with the nominal capacity of the system going from approximately 300,000 barrels per day to 890,000 barrels per day, delivering more Canadian crude oil to meet demand in global markets.
This project is in the national interest and will make Canada and the Canadian economy more sovereign and more resilient, the statement said.
Editor: Galia
