Canada to buy Kinder Morgan's Trans Mountain pipeline


If Canada indeed ends up buying the pipeline, it will be exclusively to ensure its capacity can be tripled, allowing Canada to find new export markets for its oil resources, Morneau said - and that ultimately, the long-term goal will be to find a private-sector buyer to take it over.

"This is an investment in Canada's future", Canada Finance Minister Bill Morneau said in announcing the C$4.5 billion ($3.6 billion) agreement Monday morning for the 1,150-kilometer (920-mile) pipeline to a tanker dock in the Vancouver suburb of Burnaby.

"Our government's position is clear: it must be built, and it will be built".

To do so, Canada will pay the pipeline's current owner, Kinder Morgan, $4.5 billion in Canadian dollars - about $3.5 billion in USA currency.

The company has set a May 31 deadline for getting assurances it can proceed without delays on the controversial project.

Morneau said there'd be no fiscal impact of the plan - suggesting he doesn't expect to make or lose money on the deal.

"Actions by the British Columbia government have created mounting political uncertainty and has repercussions on industries across the country". "The only (way) in our estimation that that can be done is through exerting our jurisdiction by purchasing the project".

He said his company had agreed to work with the government to try to find a third party to buy the assets by July 22. "I think that's been reinforced by the fact that Kinder Morgan was able to build up through different open seasons to a high level of commitment (from shippers)", he said.

Pending their approval, the sale would be finalized sometime in August or September.

"I remain concerned that the adverse consequences of a spill are not yet fully understood", Horgan told radio station CKNW.

After the federal government's announcement, Kean said the work would be restarted soon, with the government funding construction.

Now 99 percent of Canada's oil is sold to the United States at a discount, and access to the Pacific coast is seen as key to diversifying the world's sixth largest oil producer's energy exports.

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"We'll get that pipeline built", Trudeau told reporters as he headed into a cabinet meeting. Existing statutes stipulate one level of government can not interfere with the work of another - a situation one official called a "conversation changer" that might convince Horgan to back down.

The move effectively nationalizes the project in a bid to quash dozens of legal challenges and illegal protests at construction sites.

Morneau stressed repeatedly the pipeline is commercially viable and profitable. The proposal is to run the pipeline parallel to the existing one that runs between Edmonton and Burnaby to increase capacity nearly three fold.

The price tag for the Trans Mountain expansion has been pegged at $7.4 billion but Carr would not say whether that figure was accurate or if there has been cost overruns.

The government has an estimate, but disclosing it would put the government at a disadvantage when it comes to finding a private-sector buyer, officials later clarified.

"Something had to happen", Bloomer said of delays blamed on opposition by British Columbia's provincial government, municipalities, Indigenous groups and individual protesters.

Horgan said he's anxious about the "catastrophic consequences" should there be a spill, regardless of the owner, and will continue to fight it in court.

Prime Minister Justin Trudeau has put a lot of political capital on the project, pledging over and over again that the pipeline expansion is in national interest and will be built one way or another.

That decision came as British Columbia Premier John Horgan was working on a court challenge to seek judicial guidance on whether provinces can restrict what flows through pipelines for environmental reasons.

Alberta Premier Rachel Notley cheered the news of the federal government's purchase on Twitter.

"Many British Columbians feel very passionatiately about this project". "That certainty is absolutely critical".

She added Alberta is willing to invest up to $2 billion in indemnity that will be converted to equity if necessary. Indigenous groups said their concerns are being ignored.

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