Trans Mountain oil pipeline request heads to Friday regulatory hearing

By Rod Nickel

WINNIPEG, Manitoba (Reuters) - The Canada Energy Regulator (CER) will conduct a hearing on Friday about Trans Mountain Corp's request for a change in construction to complete expansion of its oil pipeline from Alberta to British Columbia, according to a filing on Monday.

The long-delayed project will nearly triple shipments of crude to 890,000 barrels per day once it starts operating, expanding access for Canadian oil to refineries on the U.S. West Coast and in Asia.

The CER said in a letter to the Canadian government-owned pipeline company filed on the regulator's website that it needs more information about a change the company is requesting on its construction method and will conduct an oral hearing in Calgary.

The regulator said it would ask questions of Trans Mountain and the company would have a brief opportunity to make a final argument.

Trans Mountain had asked the CER to allow it to install smaller-diameter pipe in a 1.4-mile (2.3 km) section of the nearly completed oil pipeline's route after encountering challenging drilling conditions in a mountainous area between Hope and Chilliwack, British Columbia.

The CER denied the request on Dec. 5, later saying that the application did not adequately address concerns about pipeline integrity and the environment. Trans Mountain then asked the regulator to reverse that decision on Dec. 14, warning of a possibly "catastrophic" two-year delay and billions of dollars in losses.

Trans Mountain had asked for a decision no later than Jan. 9.

The CER said it is not inviting interested persons to participate. The hearing, which begins at 11 a.m. ET (1600 GMT), will be broadcast live on its website.

The regulator did not say when it would announce a decision.

The expanded pipeline is scheduled to start shipping crude by the end of the first quarter, but the risk of further delays has been weighing on Canadian crude prices in recent months. Last week, Trans Mountain said it could begin line fill - a final step before beginning service - in March or May depending on the CER's decision, assuming no new problems emerge.

Prime Minister Justin Trudeau's Liberal government bought the project, which faced opposition, in 2018, to ensure the expansion went ahead, but costs have ballooned to C$30.9 billion ($23.06 billion), more than four times the original budget.

($1 = 1.3402 Canadian dollars)

(Reporting by Rod Nickel in Winnipeg, Manitoba, Editing by Franklin Paul)