The Trans Mountain Expansion Project achieved commercial commencement on May 1, 2024, nearly tripling pipeline capacity to 890,000 barrels per day. The $34 billion project—the most expensive infrastructure undertaking in Canadian history—took over a decade of regulatory battles, federal government acquisition, and construction challenges to complete.
Now Trans Mountain Corporation is exploring a different approach: optimization projects that could add up to 360,000 barrels per day of additional capacity—a 40% increase—for approximately $4 billion and without constructing new pipeline.
The strategy leverages existing infrastructure through technological and mechanical improvements rather than new construction. If successful, it would demonstrate that Canada can expand energy export capacity faster, cheaper, and with less regulatory friction than traditional pipeline development.
The Optimization Strategy
Trans Mountain is pursuing two primary optimization approaches:
Drag Reducing Agents (DRA)
Drag reducing agents are chemical additives injected into pipelines at very low concentrations—a few parts per million. These polymers act as "shock absorbers," reducing turbulence and friction that slow oil flow through the pipe.
Trans Mountain's DRA project would install 17 injection units at pump stations along Lines 1 and 2. The relatively simple infrastructure—chemical storage, injection equipment, and monitoring systems—can be installed without major construction.
Expected capacity increase: Approximately 90,000 barrels per day (10% improvement) Estimated cost: $10-20 million Timeline: 8 months of construction starting Q2/Q3 2026
The company plans to file with the Canada Energy Regulator in Q1 2026 under Section 214 of the Canadian Energy Regulator Act, which provides potential exemptions from certain regulatory provisions for minor facilities.
Mainline Optimization
More substantial capacity increases require infrastructure additions within the existing pipeline corridor:
- Addition of approximately 30 kilometers of new 36-inch pipe between Darfield and McLure
- New pump stations to increase flow velocity
- Facility improvements between Edmonton and Burnaby
This mainline optimization could increase total system throughput from 890,000 to approximately 1,250,000 barrels per day.
Expected additional capacity: 270,000+ barrels per day Estimated cost: $3-4 billion Timeline: 4-5 years for implementation
Why This Matters
The optimization approach offers significant advantages over new pipeline construction:
Regulatory Efficiency
New pipelines require extensive environmental assessments, Indigenous consultation, and multi-year approval processes. The original Trans Mountain Expansion took over a decade from proposal to operation.
Optimization projects use existing pipeline corridors with established regulatory approvals. The DRA project qualifies for streamlined Section 214 review. Mainline optimization requires CER approval but benefits from existing environmental assessments and consultation relationships.
Cost Effectiveness
The math is straightforward: $4 billion for 360,000 barrels per day versus $34 billion for the original 590,000 barrel expansion. Even accounting for inflation and project-specific factors, optimization delivers capacity at a fraction of new construction costs.
Lower capital costs translate to lower tolls for shippers, improving Canadian oil's competitiveness in global markets.
Time to Market
The DRA project could be operational within 18 months of approval. Mainline optimization would take 4-5 years—still significantly faster than the decade-plus timeline for new pipeline development.
With Trans Mountain forecasting that the system could reach full capacity by 2027-2028 as oil sands production grows, the timing matters. Optimization provides capacity before constraints emerge.
Export Diversification Results
Trans Mountain has already demonstrated the value of Pacific export access.
Since commercial commencement on May 1, 2024, the pipeline has loaded 380 vessels at the Westridge Marine Terminal. Fifty-seven percent of vessels are destined for Asia, with crude oil exports to Indo-Pacific markets surging from virtually zero to an average of C$571 million per month.
The geographic diversification is significant: roughly 50% of marine terminal shipments now go to countries other than the United States on the Pacific Rim. Heavy crude exports have been particularly strong to Asian markets seeking feedstock for petrochemical production.
This diversification directly addresses the vulnerability exposed by U.S. tariff threats. When 97% of Canadian crude exports flowed to a single market, that market had substantial leverage. Trans Mountain creates alternatives.
Indigenous Ownership Discussions
Trans Mountain Corporation remains a federal Crown corporation, wholly owned by Canada Development Investment Corporation. The federal government has stated it does not intend to be the long-term owner.
Several Indigenous groups are pursuing ownership stakes:
Project Reconciliation is working with 129 Indigenous communities along the pipeline route, seeking what lead advocate Mason describes as "material" ownership—potentially approaching 100% Indigenous equity. The initiative emphasizes that ownership provides funding for critical community infrastructure: housing, roads, water systems.
Nesika Services is coordinating potential ownership participation for communities along the corridor.
Department of Finance analysis has concluded that revenue-sharing or equity stakes would be Indigenous communities' "preferred" options. The eventual divestiture structure remains under negotiation.
Shipper Interest
Trans Mountain is planning an "open season" to formally gauge shipper interest in optimization capacity. The process will determine whether sufficient commitment exists to proceed with drag reducing agents and mainline improvements.
Early indications suggest strong support:
- Approximately 80% of current capacity (707.5 thousand barrels per day) is reserved by committed shippers with long-term take-or-pay contracts
- Oil sands producers face constraints as production grows while pipeline capacity remains fixed
- Shippers prefer optimization's lower toll structures compared to new pipeline development
The open season results will inform Trans Mountain's final investment decision, expected in 2026.
The Regulatory Precedent
Trans Mountain optimization could establish a template for future Canadian energy infrastructure development.
The approach demonstrates that capacity can be added through existing corridors without repeating the multi-decade approval processes that characterized Trans Mountain Expansion, Keystone XL, Northern Gateway, and Energy East. If regulators and stakeholders accept optimization as a legitimate expansion mechanism, similar approaches could apply to other infrastructure.
The model has limitations—optimization only works where pipeline infrastructure already exists with surplus design capacity. But for existing assets, it offers a path to growth that avoids the political and regulatory obstacles that have stalled Canadian energy development.
The Path Forward
Trans Mountain's optimization strategy proceeds through several phases:
2026: DRA project regulatory filing (Q1), construction start (Q2/Q3), open season for mainline optimization 2027: DRA operational, mainline optimization investment decision 2028-2030: Mainline optimization construction and commissioning
If executed successfully, Trans Mountain could be moving 1.25 million barrels per day by the end of the decade—40% more than current capacity—while avoiding the controversies that have paralyzed other Canadian pipeline development.
The strategy won't satisfy those who oppose all fossil fuel infrastructure expansion. But it offers a pragmatic path for a country that has struggled to build new energy infrastructure: maximize the value of what already exists.
At SHIFT, we help energy companies communicate infrastructure strategies to regulators, stakeholders, and the public. Trans Mountain's optimization approach represents a different kind of communications challenge than new construction—one focused on demonstrating that expansion can be responsible, cost-effective, and compatible with existing regulatory frameworks. The companies that communicate this effectively will shape how Canada approaches future infrastructure development.