Pipeline Profiles: Trans Mountain

Pipeline system and key points

Updated February 2018

Trans Mountain Pipeline map

The Trans Mountain Pipeline transports crude oil and refined petroleum products from Edmonton, Alberta to refineries and terminals in British Columbia and Washington State. Crude oil is also shipped to offshore markets in Asia and the U.S. west coast via the Westridge Marine Terminal in Burnaby, British Columbia.

Trans Mountain started operations in 1953 and is unique among the major pipelines out of the Western Canadian Sedimentary Basin in that it ships the full spectrum of oils (from refined petroleum products to heavy crude oil) in a single line.

The Trans Mountain Pipeline has oil receipt points at Edmonton, Alberta and Kamloops, B.C.  At the Sumas delivery point, the Trans Mountain Pipeline connects with the Puget Sound Pipeline, owned by Trans Mountain Pipeline (Puget Sound) LLC,  which delivers oil to four refineries on the west coast of Washington State.

At the Burnaby Terminal, connecting pipelines enable deliveries of crude oil and refined petroleum products to Parkland’s Burnaby Refinery and to Suncor’s Burrard refined products marketing terminal.

The Westridge Marine Terminal is located approximately three kilometres from the Burnaby Terminal. It facilitates marine exports from the Trans Mountain Pipeline to coastal refineries, such as those on the U.S. West Coast or in Asia.

In December 2013 Trans Mountain Pipeline ULC filed an application for the Trans Mountain Pipeline Expansion Project and on 19 May 2016, the Board recommended approval. On 29 November 2016, the Canadian federal government approved the expansion project. Upon completion the project would increase the capacity of the Trans Mountain system to 141 500 cubic metres per day (m3/d) (890 thousand barrels per day (Mb/d)).

Official Board documents related to the construction, operation and maintenance of the Trans Mountain Pipeline can be found here: Trans Mountain pipeline regulatory documents [Folder 454627].

Throughput and capacityFootnote 1

Updated quarterly

 

Open data can be freely used and shared by anyone for any purpose. The data for these graphs are available.

Tolls

Updated January 2018

A toll is the price charged by a pipeline company for transportation and other services. Tolls allow pipeline companies to safely operate and maintain pipelines. Tolls also provide funds for companies to recover capital (the money used to build the pipeline), pay debts, and provide a return to investors. The interactive graph below shows the tolls for key paths on the pipeline.

 

Trans Mountain currently operates under a three-year Incentive Toll Settlement (2016-2018 ITS). Tolls have fluctuated as over or under-recoveries of revenues are transferred to future years. Tolls are based on the quality of crude oil, the volumes and the specific pipeline path. Since January 2015, consideration of a shipper's previous delivery volumes has helped determine fair and equitable allocation of Trans Mountain system capacity.

Abandonment funding

Updated May 2018

The Board requires all pipelines to set aside funds to safely cease operation of a pipeline at the end of its useful life. In 2016, Trans Mountain estimated it would cost $368 million to do this. These funds will be collected over 40 years and are being set aside in a trust. Official Board documents related to abandonment funding can be found here, sorted by year and by company: abandonment funding documents [Folder 3300366].

Financial resource requirements

Updated February 2018

The National Energy Board Act requires major oil pipeline companies to set aside $1 billion to pay for the costs of any incident that occurs, such as a spill. See sections 48.11 to 48.17 of the Act for more information. Trans Mountain Pipeline ULC demonstrated that is has financial resources in excess of $1 billion dollars. Official Board documents related to the Trans Mountain’s financial resources can be found here: Trans Mountain financial resources documents [Folder 2949657].

Pipeline financial information

Updated February 2018

Pipeline companies report important financial information to the Board quarterly or annually. A strong financial position enables companies to maintain their pipeline systems, attract capital to build new infrastructure, and meet the market’s evolving needs. The data in this table comes from Trans Mountain’s incentive toll settlement filings with the Board [Folder 552980].

Table 1: Trans Mountain Pipeline financial data
  2011 2012 2013 2014 2015 2016 2017
Revenue requirement (millions) $270 $295 $275 $292 $293 $270 $287Table Note a
Rate base [average plant in service] (millions) $1019 $1002 $992 $990 $995 $991 $989Table Note a
Deemed equity ratio 45% 45% 45% 45% 45% 45%

45%

Return on equity (achieved) 10.5% 9.82% 9.5% 8.06% 8.5% 9.5% 9.5%Table Note a

Corporate financial information

Updated February 2018

The Trans Mountain Pipeline is owned by Trans Mountain Pipeline L.P., an indirect wholly owned subsidiary of Kinder Morgan Canada Limited Partnership (KMCLP). KMCLP is jointly owned by Kinder Morgan Inc. and Kinder Morgan Canada Limited. In 2017, Kinder Morgan Canada held an Initial Public Offering (IPO).   Following the IPO, Kinder Morgan Inc. retained a 70% ownership of Kinder Morgan Canada.  The Trans Mountain Pipeline represents less than 2% of Kinder Morgan Inc.’s earnings.

Kinder Morgan Cochin ULC, another indirect wholly owned subsidiary of Kinder Morgan Canada Limited, was recently issued a rating of BBB(high) by DBRS and BBB by S&P following closing of $5.5 billion in secured credit facilities to fund, in part, the Trans Mountain Expansion Project.  The credit facilities are guaranteed by Kinder Morgan Canada Limited, Kinder Morgan Canada Limited Partnership and other entities comprising KML’s businesses.

Kinder Morgan Inc.’s financial ratios continue to be stable and credit ratings are investment grade. Credit ratings and financial ratios provide an idea of the financial strength of a company, including its ability to attract capital to build new infrastructure and meet financial obligations. The credit ratings below are expert opinions of how likely the debt issuer is to live up to its obligations. The financial ratios provided below were calculated by DBRS.

Table 2: Kinder Morgan Inc. Financial Ratios and credit ratings
  2012 2013 2014 2015 2016 2017
Interest and fixed-charges coverage ratio 2.35 2.87 3.04 2.45 2.36 n/a
Cash Flow-to-Total Debt Ratio 9.1% 12.2% 10.8% 11.2% 12.2% n/a
DBRS credit rating BB BB BB BBB(low) BBB(low) BBB(low)

Financial regulatory audits

Updated February 2018

The Board audits pipeline companies to confirm compliance with the National Energy Board Act, regulations, Board orders and Board decisions. Financial regulatory audits focus on toll and tariff matters such as detecting cross-subsidies. Trans Mountain’s last audit was completed in February 2008. Official Board documents related to Trans Mountain’s financial regulatory audits can be found here: [Folder 571482]

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