Deal by Kinder Morgan Canada to sell Trans Mountain welcomed with misgivings
- Author: Joey Payne May 30, 2018,
May 30, 2018, 11:30
OTTAWA-Canada on Tuesday struck a multibillion deal with Kinder Morgan Inc.to take ownership of the Trans Mountain pipeline project in a bid to save the project.
Morneau presented the options during an early-morning cabinet meeting Tuesday before ministers signed off on the chosen option, which comes just days before the company's self-imposed May 31 deadline and is still subject to the approval of Kinder Morgan shareholders. Finance Minister Bill Morneau told media that the next step will be to sell it off to the highest bidder once market conditions allow. "They are getting a very good value", said Paul Bloom at Bloom Investment Counsel Inc, which owns about 300,000 shares in Kinder Morgan Canada.
"It's the kind of epic disaster of the last century I couldn't imagine a modern government doing, but that's exactly what we are doing", May said.
"By purchasing the project, the federal government now has the power to make sure that it goes ahead", she said. The purchase will see Canada buy the existing pipeline, the Westridge marine terminal in Burnaby, B.C., as well as pumping stations and rights of way along the routes.
To help attract a future buyer for the pipeline, Morneau said, the government plans to "extend the federal indemnity to protect any new owner from costs associated with politically motivated delays".
Once the sale is final, Canada will continue construction on its own in hopes of selling the pipeline down the road.
He said it threatens Canada's reputation as a safe place to invest, puts thousands of jobs at risk and holds back Canada's economic growth.
"The federal government has reached an agreement with Kinder Morgan to buy the Trans Mountain pipeline and the infrastructure related to the project,"said Morneau".
Meanwhile, Green Party leader Andrew Weaver was much more critical of the federal government with his comments today.
"There is a very strong business case for this pipeline", Prime Minister Justin Trudeau told Bloomberg Television, saying the government takeover meant "a lot of the legal barriers and a lot of the challenge points actually disappear".
"Trudeau is gambling billions of Canadian taxpayer dollars on an oil project that will never be built", Mike Hudema, a climate and energy Campaigner at Greenpeace Canada, declared in a statement on Tuesday.
Morneau said Indigenous groups, pension funds, and others have expressed interest in the project.
"If you think about the dozens of pipelines that exist for crude oil, natural gas liquids, natural gas itself, petroleum products, all throughout the USA and Canada - and we track this stuff - I'm not aware of a single one that's owned by any government entity ... not on this scale". The move ended weeks of speculation sparked by Kinder Morgan's threat to abandon a project facing "unquantifiable risk" as the British Columbia government vowed to use every tool to block it.
"The majority of Canadians support this project".
Canada's oil sector has been stung in the past year as foreign energy companies retreated amid concerns about the environmental toll, high production costs and a risky regulatory regime.