Canada’s major energy project, Trans Mountain Corp., is exploring a debt deal to refinance a portion of its C$25.3 billion ($18.4 billion) debt load before the government divests its ownership, Bloomberg News reported Monday, July 22, 2024. 

The pipeline, which transports oil from Alberta to the British Columbia coast, has faced many challenges, including regulatory and environmental concerns, leading to delayed completion and cost overruns. However, its strategic importance in the energy sector remains significant.

The pipeline operator, which completed a major expansion project in May, seeks to bolster its financial position as it prepares for a potential sale to Indigenous groups. 

With a price tag of C$34 billion ($24.72 billion), the Trans Mountain Pipeline expansion project nearly tripled the pipeline’s capacity to 890,000 barrels of oil per day from Alberta to the Pacific coast.

The federal government purchased the pipeline in 2018 to ensure its completion after years of regulatory hurdles and cost overruns. Ottawa is currently amending regulations to facilitate the sale of the state-owned asset.

According to the report, the debt deal would help manage existing liabilities and position the company for potential divestment, with the pipeline’s fate anticipated to influence oil markets, environmental policies, and investor confidence.