On Pacific Link, the crew is the bid

Start with a number the owner already knows.

Trans Mountain’s expansion cost $34.2 billion and laid about 980 km of new pipe. That is roughly $35 million a kilometre, all in.

Alberta’s estimate for Pacific Link is $35.2 to $43.7 billion for about 1,200 to 1,250 km. That works out to roughly $28 to $36 million a kilometre.

The budget doesn’t assume the next kilometre costs more than the last one. At the low end, it assumes it costs about a fifth less.

These are our back-of-envelope figures, and they are not like-for-like. Trans Mountain’s total includes financing and a great deal of unplanned work, and we don’t know what sits inside Pacific Link’s “including contingency.”

A bet on productivity

Our read: it is the same corridor, more kilometres, bigger ships at the far end and years of cost escalation in between. Escalation alone would normally push the figure well above $35 million a kilometre, yet even the top of the range is only about 4% higher. For the budget to close, crews have to get more done per day than they did last time. That makes it a bet on productivity, and the last build is the evidence for what losing that bet costs.

What the last build lost

In February 2022 Trans Mountain lifted its estimate from $12.6 billion to $21.4 billion. By its own breakdown:

• $1.6 billion was productivity: a major contractor removed, scarce experienced workers, permit delays and unforeseen ground conditions
• $2.6 billion was schedule pressure: floods, seasonal work windows, heat and fires, and earthworks at the Burnaby and Westridge terminals

That is $4.2 billion of an $8.8 billion step, nearly half. The next update, to $30.9 billion in March 2023, again listed lower contractor productivity, labour shortages and “green-hand” labourers.

The pool, as forecast

BuildForce Canada’s 2026–2035 outlooks, published July 20, put numbers on the supply side:

• B.C.: 48,200 workers to recruit. Retirements are 46,700 (22% of the workforce) against 40,800 young local entrants, which leaves about 7,400 to come from migration, other sectors or other provinces (our arithmetic). Engineering construction is forecast to fall after 2027 as current projects wrap up.
• Alberta: 48,800 workers to add. Retirements are 43,700 (21%) against 43,500 local entrants, a projected shortfall of 5,300.

For scale, 28,900 individual people had worked on Trans Mountain by the end of 2022.

Then two decisions landed

That outlook came out on July 20. On September 29, Shell and its partners took a final investment decision on two more LNG Canada trains at Kitimat, doubling the plant to 28 million tonnes a year, with operations in the early 2030s. Two days later Ottawa listed Pacific Link, with approvals targeted for September 2027 and completion between 2032 and 2034.

Roberts Bank Terminal 2, approved in 2023, has not started construction; the port authority is working toward operations in the mid-2030s.

We have seen this overlap before. In 2022–23, Trans Mountain, Coastal GasLink, LNG Canada and Site C were all in the field in B.C. at the same time, and Trans Mountain’s own estimates blamed scarce experienced workers.

Our read: the B.C. outlook refers to four federal “nation-building” projects among its drivers, without naming them in the release. Whatever it assumed, both of these decisions have since moved from proposed to far more certain. A curve that falls after 2027 is hard to square with either.

What wins

Our read: an owner that has paid for lost productivity doesn’t buy a rate sheet. It buys crews.

• Name your people. Superintendents, foremen, key welders and operators, with retention terms. A price without names is a price for a crew you don’t have yet.
• Bring your productivity record. Output per crew-day on your last two jobs, with the weather and the ground attached. It is the opposite of that $1.6 billion line, and the owner has reason to look for it.
• Train for 2030, not 2027. Most trades take three to five years to certify. Apprentices signed next year are the journeypersons the peak will need.
• Ask how packages will be sequenced. Crews can’t be in two places at once, and staggered awards help the owner and you.
• Price the market. Retention and escalation clauses cost less than a repeat of 2022.

Every month of slippage defers about 30 million barrels of throughput. Put your own netback on that number.

The numbers behind this issue

BuildForce Canada: British Columbia outlook, 2026–2035

The source for B.C.’s 48,200 recruits, 46,700 retirements and the fall in engineering construction after 2027.

BuildForce Canada: Alberta outlook, 2026–2035

Alberta’s version: a projected shortfall of 5,300, and the Indigenous share of the construction workforce (6.5%).

Documents detail billions in Trans Mountain cost increases (ConstructConnect)

The line-by-line breakdown of the 2022 increase, including the $1.6 billion for productivity and $2.6 billion for schedule pressure.

Trans Mountain updates cost and schedule (GlobeNewswire)

The March 2023 release that moved the estimate to $30.9 billion and listed the causes.

Shell takes FID to double LNG Canada capacity (Hydrocarbon Engineering)

Two more trains at Kitimat, 28 million tonnes a year, operations in the early 2030s.

Alberta formally proposes West Coast Oil Pipeline (DieselNet)

Alberta’s July submission as reported: the $35.2–43.7 billion estimate, the 1,200–1,250 km length and the 2032–2034 completion window.