Canada to Buy Kinder Morgan Pipeline for $3.5 Billion

May 30, 2018, 05:27
Canada to Buy Kinder Morgan Pipeline for $3.5 Billion

The Canadian government has announced it will buy Kinder Morgan's Trans Mountain pipeline project for C$4.5bn ($3.5bn US) - but does not intend to be the long-term owner of the project, which has faced fierce environmental opposition. Finance Minister Bill Morneau told media that the next step will be to sell it off to the highest bidder once market conditions allow.

Kamloops Chamber of Commerce president Joshua Knaak said he was shocked by the announcement.

"(The expansion project) went through extraordinary reviews and was approved by the government of Canada 18 months ago", he said.

She suggested that could mean B.C.'s constitutional argument over that government's say in what moves through the province will have less relevance. He called for confidence to be restored in Canada.

The finance minister says the move will "ensure" the oilsands pipeline expansion gets built. Ottawa is deluding itself if it thinks there will be any stronger commercial interest in the project down the road than there is now. "But we had private industry that was willing to do it".

Wall now serves as a special advisor for Osler, Hoskin & Harcourt LLP, which represented Kinder Morgan in its initial National Energy Board application to expand Trans Mountain. Additional spending on construction is anticipated.

Horgan said the project has not been a personal issue between him and the Prime Minister and they've worked together on a range of issues, but they disagree on this matter.

Alberta's oil industry has seen its attempts to have other pipeline projects built sunk by regulatory and political opposition, including cross-border projects such as Keystone XL, still stalled because of opposition in Nebraska and South Dakota. Kean is also CEO of Kinder Morgan, Inc., the Houston-based firm that owns 70 per cent of the Canadian firm.

Kamloops' two MLAs blame Premier John Horgan for what they called "a sad, sad day for this country".

Alberta will also invest up to $2 billion in indemnity, to be converted to equity if necessary. "That is wrong is so many ways".

"I hope this works", tweeted Moe, adding the decision by the federal government leaves questions.

While he isn't happy about the federal government's decision to buy the pipeline project, Milobar said "it's understandable why government wants it to proceed and it will be good if the government gets it across the finish line".

Twenty-nine kilometres of the pipeline runs through Kamloops.

Alberta Premier Rachel Notley cheered the news on Twitter.

"The Indigenous-led, people-powered movement that led Kinder Morgan to abandon ship on this project is stronger than ever and will not back down".

Kinder Morgan Canada will continue to hold an integrated network of crude tank storage and rail terminals in Alberta, the company said. "At a critical moment in history, the government is indeed doing "whatever it takes" to undermine our transition to a safe, clean, renewable energy future". The purchase will be financed by Export Development Canada. If Alberta simply upgraded what it sent through the Trans Mountain pipeline into oil, the existing pipeline's capacity, as well as that of all other pipelines that service the oil sands, could be boosted by a third.