TMX Update: Project Faces Delays as Completion Nears

The 590k b/d TMX pipeline expansion is around 97% complete, with the target completion date Q1 2024.

• However, the project could face a delay of around two months following the denial of its variance application by the Canada Energy regulator last week.
• Trans Mountain had applied to use a smaller diameter pipe in a section where hard rock was causing difficulties drilling.
• The company told Bloomberg that it was waiting to learn why the regulator denied its application.
• The news of potential further delays did not have a significant impact on Canadian crude prices, which remain at their narrowest levels to WTI since September. However, there has been some widening from the recent narrow discount of $18.65/b Dec. 6 to $20/b Dec. 8
• When complete, the pipeline will be able to lift the demand outlets for land-locked Canadian barrels, expected to narrow Canadian Crude-WTI differentials.