Read this story from the Vancouver Sun on Kinder Morgan’s decision to scale back the planned capacity for its new twinned pipeline to Vancouver from 850,000 barrels of Tar Sands crude per day to 750,000, following lower than expected demand from shippers. (May 24, 2012)

Kinder Morgan Energy Partners has reduced the size of a planned expansion of its pipeline to the Pacific Coast after fewer shippers than expected signed 20-year con-tracts that would allow surging oil supplies to be shipped to Asia, the company said on Wednesday.

Kinder Morgan now plans a $4.1-billion expansion of its Trans Mountain pipeline to the Vancouver area from Alberta, increasing capacity to 750,000 barrels a day from 300,000. That is down from last month’s estimate of 850,000.

It had expected enough con-tracts to support a $5-billion project with crude production from the Alberta oilsands forecast to more than double over the next decade. But a few potential shippers it thought would sign onto the lengthy obligations had failed to obtain their boards’ approvals by the deadline, prompting the reduction, Kinder Morgan said.

The Trans Mountain expansion is the second multibillion-dollar proposal aimed at opening up lucrative new markets in Asia for Canadian oil producers, now captive to U.S. customers amid a glut that has led to bargain-basement price discounts.

The first, Enbridge Inc’s $5.5-billion Northern Gate-way pipeline to Kitimat from Alberta is the subject of public hearings that began in January.

Both projects face opposition from environmental groups and some native communities in British Columbia. Vancouver city council has also come out against the Kinder expansion, which would increase tanker traffic in the city’s harbour.

Ottawa has signalled strong support for new pipelines to the West Coast, and is making changes to regulatory reviews aimed at speeding up approvals.