By Ismail Shakil
OTTAWA, Dec 23 (Reuters) – The Canadian authorities is backing as much as C$2 billion ($1.5 billion) in new business loans for Trans Mountain Corp (TMC), the crown company constructing an over-budget and long-delayed oil pipeline growth to the Pacific coast.
Info posted on Export Growth Canada’s web site on Friday confirmed a C$1.75 billion to C$2 billion mortgage assure for TMC was signed on Nov. 30. The federal government’s backing lowers the danger to lenders and would assist TMC safe loans at decrease rates of interest.
Earlier than the most recent assure, Ottawa had backed as much as C$6 billion in loans for government-owned TMC in 2023.
Final yr, TMC secured C$10 billion in government-backed financing to assist cowl the growth of a pipeline that may almost triple the circulation of crude from landlocked Alberta’s oil sands to the Pacific coast province of British Columbia.
The growth mission is supposed to unlock Asian markets for Canadian oil, which is usually exported to the US now.
Prime Minister Justin Trudeau’s Liberal authorities purchased the troubled mission in 2018 to make sure its completion.
The mission has been hampered by regulatory obstacles, environmental opposition and building delays, and prices have ballooned to C$30.9 billion, greater than quadrupling the C$7.4 billion budgeted in 2017.
Within the newest setback, the Canada Power Regulator stated on Wednesday it denied a variance request for the mission as a result of TMC’s utility didn’t adequately handle issues about pipeline integrity and environmental safety impacts.
TMC has requested the regulator to reverse its variance determination on the grounds it may trigger a “catastrophic” two-year delay and billions of {dollars} in losses.
The expanded pipeline is supposed to start out delivery crude by the tip of the primary quarter of 2024. The chance of additional delays is weighing on Canadian crude costs. ($1 = 1.3272 Canadian {dollars}) (Reporting by Ismail Shakil in Ottawa Enhancing by Chris Reese)
