Trans Mountain CEO says Canada should not rush potential sale of TMX pipeline

Canada should not rush to sell the newly expanded Trans Mountain oil pipeline, its CEO, Mark Maki, said on Wednesday at a conference in Canada.

The Canadian Government, which owns the pipeline and spent CA$34 billion ($25 billion) completing an expansion that opened last spring, has indicated it does not wish to be the long-term owner of the pipeline.

Maki said on Wednesday he believes the government can recover its investment in the pipeline, but would receive a better sale price for the asset if it waits until Trans Mountain has had longer to prove its value and certain uncertainties related to capacity and utilisation have been resolved.

"It's ultimately their decision," Maki said. "The one thing we have said consistently to the government is, 'don't hurry'." Use of the newly expanded pipeline, which carries oil from Alberta to British Columbia's west coast where it can then be transported by ship to overseas markets, has increased more slowly than expected.

This is in part because oil companies have been hesitant to pay the higher tolls Trans Mountain has been charging customers to cover construction cost overruns, raising questions about the pipeline's ability to generate revenue and in turn about Ottawa's ability to attract a private sector buyer.

Maki told reporters on the sidelines of Wednesday's conference that the 890,000-barrel-per-day pipeline has been operating at approximately 85 per cent capacity in the second quarter.

Trans Mountain had earlier been forecasting 96 per cent utilisation on the pipe every year starting in 2025.

Its best month so far was March of this year, when the pipeline was just under 90 per cent full, Maki said.

The Trans Mountain pipeline has successfully achieved its goal of opening up Asian export markets to Canadian crude, Maki said, and he said he expects that continued demand from that continent for Canadian barrels should support the pipeline's long-term utilisation.

Trans Mountain is also exploring both short- and long-term optimisation projects aimed at increasing pipeline capacity by 200,000 to 300,000 barrels per day. Maki said it makes sense for the government to hold off selling the pipeline until the capacity improvements are finalised.

A regulatory hearing with the aim of resolving the tolling dispute between the pipeline operator and its oil shipping customers has been scheduled for late 2025.

(Reporting by Amanda Stephenson in Calgary; Alberta; Editing by Liz Hampton, Chris Reese and Matthew Lewis)