Trans Mountain Corporation (TMC) has announced a significant development in its ongoing negotiations with oil shippers. After 18 months of extensive discussions, TMC has filed a negotiated settlement with the Canada Energy Regulator (CER) concerning tolling, tariffs, and service-related matters on the Trans Mountain Pipeline System. This settlement represents the substantial majority of contracted firm shipment volumes on the system and reflects a broad range of commercial interests.
The settlement aims to establish a comprehensive long-term framework for tolls, tariffs, and services, providing greater certainty and predictability for customers and stakeholders. It also supports the long-term operation of the Trans Mountain Pipeline System. CEO Mark Maki emphasized the importance of this agreement, stating that it "provides a clear path forward for the Trans Mountain System and its customers, reflecting significant work by all parties to reach a balanced agreement."
Key aspects of the settlement include:
- Establishing a new long-term framework for tolls and service on the system.
- Resolving all issues currently before the CER in Proceeding RH-002-2023.
- Finalizing tolls for the period from May 1, 2024, to the day immediately prior to the settlement effective date.
- Increasing the level of firm capacity on the system from 80% to 90% of nominal pipeline capacity.
- Aligning tolling, transportation service, and commercial operating terms within a single negotiated framework.
Trans Mountain has requested CER approval of the settlement application by October 1, 2026, to support implementation of the new framework and a potential January 1, 2027, settlement effective date. The framework would provide commercial certainty and includes tolls for 15- and 20-year Transportation Service Agreements, along with opportunities for firm shippers to extend their contracts.
This development comes after a prolonged period of negotiations, during which oil companies had expressed concerns over higher tolls intended to cover cost overruns from the $34 billion pipeline expansion project completed in 2024. The settlement is expected to address these concerns and pave the way for a more stable and predictable operating environment for all parties involved.
Trans Mountain continues to focus on increasing capacity on existing infrastructure and providing additional competitive and reliable transportation opportunities for customers. Through its Mainline Optimization Program, including the drag reducing agent (DRA) project and targeted facility enhancements, Trans Mountain expects to add up to 300,000 barrels per day (bpd) of incremental capacity by the end of 2028.
The Trans Mountain pipeline remains Canada's only east-west oil pipeline, offering direct access to China and other Asian markets at a time when Canada is striving to diversify its oil exports away from the United States. The successful resolution of this tolling dispute is seen as a positive step toward ensuring the pipeline's continued operation and its role in connecting Canadian crude oil to global markets.
As the settlement awaits regulatory approval, stakeholders are optimistic that this agreement will lead to a more collaborative and efficient relationship between Trans Mountain and its oil shipper customers, benefiting the broader Canadian economy and energy sector.