Feds Taking Ownership of Trans Mountain

Bill Morneau - Finance Minister address

CBJ — With all the uncertainty surrounding the proposed expansion of the Trans Mountain pipeline, the federal government has decided to step in and pay $4.5 billion to buy the project and will pick up the construction of the expansion after the sale is finalized.

The deal will see Canada become the owner of the pipeline and all of Kinder Morgan Canada’s core assets, and in return Kinder Morgan will continue construction on the twinning of the pipeline this summer.

After the sale is complete the federal government will pick up the construction before selling it to a new “long-term” owner or owners. The announcement was made by Finance Minister Bill Morneau and Natural Resources Minister Jim Carr.

both the federal and Alberta government will offer financial security, or indemnification against any ongoing political risk, to the new investors.

Indigenous groups, pension funds, and others have expressed interest in the project, estimated to have a price tag of nearly $7.5 billion.

The expansion project has been tied up in legal wranglings. Both Alberta and the federal government want the project to move forward, but the B.C. government is not onboard. They have expressed concerns about the potential for environmental damage if a leak should occur.

There are also those who believe B.C. may be waiting for a greater percentage of the profits.

The fight between the two western provinces has led Alberta to making threats of cutting B.C. off from its oil entirely. B.C. responded by saying it will sue Alberta if gas prices go up because of this disagreement. Gas in many parts of B.C. has already surpassed $1.60 per litre.

@CanBizJournal

 

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