Canada to buy controversial Trans Mountain pipeline

Canada to buy controversial Trans Mountain pipeline

Canada to buy controversial Trans Mountain pipeline

Saskatchewan Premier Scott Moe is responding to the federal Liberal government's plan to spend $4.5 billion buying Kinder Morgan's Trans Mountain pipeline and core assets.

As part of the deal, Finance Minister Bill Morneau says that Kinder Morgan will go ahead with its original plan to twin the pipeline this summer while the sale is finalized, which likely won't happen until August. 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.

"Governments do a lot of things right, but running businesses is probably not near the top of the list", Wall said.

Kinder Morgan Canada Ltd. listed on the Toronto Stock Exchange on May 30 a year ago, luring investors with the promise of building the massive Trans Mountain expansion project.

Morneau pointed out that once the pipeline was built, the owners would receive user fees in the form of tolls from the oil companies transporting their product on TMX.

"I made a promise to the Tsleil-Waututh, Squamish and Musqueum First Nations that I would stand with them in opposing this disastrous pipeline and tanker project", she said in a press release.

The federal cabinet has been summoned to meet Tuesday morning, two hours earlier than usual, after which Morneau will discuss which of the three options the government has decided on.

In 2007, Kinder Morgan reported to the National Energy Board that it valued the Trans Mountain pipeline system at $550 million.

On the heels of Trudeau's announcement, the Vancouver-based Indigenous rights group Coast Protectors scheduled a rally for Tuesday evening to "say no to Trudeau's pipeline buy out".

The TMX expansion would raise the Alberta-to-B.C. pipeline's capacity to 890,000 barrels per day from its current level of 300,000 bpd and was expected to cost the company $7.4 billion.

The twinning of the 1,150-kilometre-long Trans Mountain pipeline between Strathcona County, near Edmonton, and Burnaby, B.C., will almost triple its capacity to an estimated 890,000 barrels a day and increase traffic off B.C.'s coast from approximately five tankers to 34 tankers a month.

The parent company, Kinder Morgan Inc, expects to collect around $1.25 billion after tax from its share of the sale.

While Brad Wall is happy the federal government stepped in to ensure the Trans Mountain extension's construction, he doesn't believe the Liberals needed to buy it.

"Our government is determined to defend British Columbia's interests within the rule of law and in the courts", said Horgan.

"Today, we've taken action to create & protect jobs in Alberta and BC, and restart construction on the TMX pipeline expansion, a vital project in the national interest", Trudeau said in a tweet. She said she predicts the price tag will make the assets a tough sell for Ottawa should the feds look to unload the project back into the private market.

There has been intense opposition towards the project from environmental groups and some Indigenous communities in B.C. "I'm concerned there could be catastrophic consequences from a diluted bitumen spill, regardless of the owner of the pipeline", Horgan said.

Canada loses $15 billion every year on the sale of oil because the US remains its only export customer, resulting in a lower price, Prime Minister Justin Trudeau argues.

When Canadian taxpayers appreciate the scale of the federal abuse of trust here as well as the government's blatant corporate welfare for a Texas pipeline company, there will be hell to pay from coast to coast.

While Ottawa's move is notionally positive for Canadian oil producers, the nationalization of key infrastructure is unlikely to boost investment confidence in Canada, noted GMP First Energy analyst Robert Fitzmartyn.

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