Monday, 16 July, 2018

Graham Thomson: Alberta government celebrates Trans Mountain pipeline project purchase

3:17pm


Image Credit CFJC Today 3:17pm Image Credit CFJC Today
Theresa Hayes | 31 May, 2018, 03:43

It could look at buying Western Canada natural gas plants now being marketed by Enbridge Inc. with the cash its getting from the sale, he said, while noting Kinder Morgan has also suggested it may distribute cash to shareholders.

The federal Liberal government is spending $4.5 billion to buy Trans Mountain and all of Kinder Morgan Canada's core assets.

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.

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.

Alberta premier Rachel Notley, whose government recently passed legislation allowing the province to restrict oil shipments, said on Twitter that the deal "puts people to work building the pipeline right away and it will help us build up the things that matter to working families, such as our schools and our hospitals". "It's a government that committed to the United Nations declaration on the rights of indigenous peoples", says Mike Hudema, climate and energy campaigner at Greenpeace Canada.

Mr. Trudeau took the joke in stride, responding that his grandfather owned gas stations, so perhaps it's appropriate his government is dropping $4.5-billion to take over the controversial energy project from Kinder Morgan Inc.

"When we are faced with an exceptional situation that puts jobs at risk, that puts our worldwide reputation on the line, our government is prepared to take action", Morneau told reporters. They are led by British Columbia, which is trying to stop the pipeline development in the courts on environmental grounds.

Steve Kean, chairman and chief executive of Kinder Morgan Canada Ltd., said the deal represents the best opportunity to complete the expansion project. The risk tolerance among its investors was threadbare.

In this case, construction of the Trans Mountain expansion-assuming a private sector buyer isn't found immediately-will be in the hands of a federal Crown corporation.

Trans Mountain runs from Alberta to British Columbia and the proposed expansion would be a twin line that would triple the system's carrying capacity to 890,000 bpd.

"Kinder Morgan never asked for one dollar of taxpayer money", Motz said. This is not a great day for Canada's reputation on the global investment front.

People who watched Trudeau orchestrate the purchase have no doubts about his resolve.

Kinder Morgan will proceed on twinning the pipeline while the sale is being finalized. But he said Ottawa's decision to step in doesn't change the Tsleil-Waututh's opposition to the project.

"CEPA is deeply concerned that the government needed to purchase the project for it to be built and to assert federal jurisdiction".

"It's not the intention of the government of Canada to be a long-term owner of the project", Morneau said, adding that pension funds and indigenous groups have already expressed an interest in buying stakes in the project.