Canada's Trans Mountain pipeline expansion project encountered new technical challenges, causing further delays in its completion.

Trans Mountain, owned by the Canadian government, confirmed the setback but did not specify the exact nature of the technical issues. They are currently evaluating the next steps to minimize the delay and are still aiming for a second-quarter launch of the expanded pipeline.

Previously, company officials had anticipated an early April startup, with volumes gradually increasing to full capacity by year-end.

The C$30.9 billion ($23.04 billion) project aims to nearly triple the flow of crude oil from Alberta to Canada's Pacific Coast, reaching 890,000 barrels per day. However, it has faced numerous delays and cost overruns throughout its development.

The current hurdle involves installing a pipeline section through a mountain in British Columbia, originally expected to be finalised earlier this week.

These latest delays add to several setbacks that have already driven down Canadian heavy oil prices in the past two months. Despite receiving regulatory approval for a construction change, Trans Mountain initially believed they had overcome these challenges.

Market participants expressed concerns about pipeline capacity limitations due to the delay. The discount on Western Canadian Select for April delivery compared to the North American benchmark widened to $16.35 per barrel, up from $14.80 before the announcement.

Trans Mountain will provide further updates on their progress and revised timeline as they determine the next steps to address the technical issues.