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Trans Mountain oil pipeline expansion may face new delays -filing

A pipe yard servicing government-owned oil pipeline operator Trans Mountain is seen in Kamloops

By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Trans Mountain Corp fears that the expansion of its Canadian oil pipeline may be delayed further unless a regulator allows it to change its route in British Columbia, according to a First Nation that opposes the route adjustment.

Cost overruns and delays have dogged efforts to triple the capacity of the government-owned pipeline that runs from Edmonton, Alberta to Burnaby, British Columbia (B.C.).

Costs of construction have more than quadrupled to C$30.9 billion ($22.80 billion). Further delay would limit options to move Canadian oil to refineries in the United States or Asia.

The Canada Energy Regulator (CER) is weighing whether to allow Trans Mountain to deviate from its approved route on a 1.3-kilometre (0.8 mile) section just south of Kamloops, B.C.

Trans Mountain has requested to use a conventional open trench because it says it has encountered "significant technical challenges" micro-tunnelling through hard rock formations.

In a Monday filing to the CER, Stk’emlúpsemc te Secwépemc Nation (SSN) said Trans Mountain CEO Dawn Farrell raised the urgency of the route change at a meeting on July 6.

"I know that it's not your concern that this is taking longer and that it's causing problems with the schedule and all the rest of it, but it is, significantly," SSN quoted Farrell as saying. "We are constrained to options that are economic and feasible within the remaining time frame."

Trans Mountain did not respond immediately to a request for comment.

The route change would harm an area that holds spiritual and cultural significance, SSN said.

SSN said it supports the pipeline expansion, but not the route deviation, which it said Trans Mountain has not shown is necessary. It said Trans Mountain has instead indicated that it is seeking the change because of cost factors and its goal to put the pipeline into service on Jan. 1, 2024.

($1 = 1.3555 Canadian dollars)

(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Andy Sullivan)