Trans Mountain Pipeline Expansion Set for 2027 Amid Growing Crude Export Constraints
Trans Mountain Corp., the government-owned pipeline operator, is preparing a series of expansion projects for its main pipeline system, with new capacity additions slated to begin in early 2027. This strategic move comes as export space out of Western Canada is projected to become critically tight once again, with crude volumes expected to exceed available pipeline capacity by this summer and consistently surpass it by summer next year.
Expansion Details and Timeline
Jason Balasch, Vice President of Business Development at Trans Mountain, revealed at a conference in Calgary that the company plans to introduce specialized chemicals into the 890,000-barrel-per-day pipeline by the first quarter of 2027. This chemical enhancement will enable crude oil to flow more efficiently, adding approximately 90,000 barrels per day to the system that stretches from Alberta to the Vancouver area.
The expansion efforts are part of a broader initiative to increase the pipeline's total capacity to 1.19 million barrels per day by the end of the decade. This follows the recent tripling of the 1950s-era pipeline from 300,000 barrels per day, a monumental project that took over a decade to complete and cost an estimated $34 billion—six times more than originally planned.
Additional Projects and Infrastructure Upgrades
Balasch outlined several other key projects in the pipeline expansion portfolio:
- Second Narrows Bridge Dredging: A final investment decision on this project is expected by this summer, with work commencing in the fall. This initiative will allow oil tankers to transport more crude under the bridge, increasing shipment capacity by 30% as early as the second quarter of 2027.
- British Columbia Infrastructure Upgrades: A third expansion involves adding nearly a dozen pump stations, replacing 30 kilometers of pipe, and installing new electric power in a remote section of British Columbia, scheduled to be operational by 2029.
- Washington State Line Expansion: A fourth project will add 35,000 barrels per day to a line running into Washington state, also set for completion in 2029.
Market Impact and Strategic Importance
Despite the substantial construction costs, the Trans Mountain pipeline has fundamentally transformed Canada's oil export landscape. For the first time, oilsands producers have been able to sell significant volumes to Asian markets, reducing the country's dependence on the United States. Currently, 60% of crude exported by tanker via Trans Mountain is destined for Asia.
Balasch noted that geopolitical events, including the ongoing war in the Middle East and U.S. military actions in Venezuela, have only increased the pipeline's strategic value. "As unfortunate as some of those events are, it is a positive tailwind for our industry," he stated. "Both of those events demonstrate the need for global producers and consumers to have multiple market options."
Current Utilization and Historical Context
Trans Mountain has historically operated below its maximum capacity due to high costs associated with non-contracted space. However, recent data from the Canada Energy Regulator shows utilization jumped to as high as 96% in November, indicating growing demand.
Canadian oil producers have faced persistent challenges with insufficient export pipelines for years, forcing companies to sell oil at increasingly larger discounts to the U.S. benchmark West Texas Intermediate. In 2018, the situation reached a critical point when Canadian heavy crude sold at a discount of nearly US$50 per barrel compared to WTI, prompting the Alberta government to impose production limits. The current discount stands at approximately US$14 per barrel.
Susan Bell, Senior Vice-President of Downstream Research at Rystad Energy, warned at the conference that crude export volumes will exceed pipeline space for about a month this summer and will consistently surpass available capacity on export lines by summer next year, underscoring the urgent need for the planned expansions.
