Federal Government to buy Trans Mountain Pipeline for $4.5 billion

Federal Government to buy Trans Mountain Pipeline for $4.5 billion

"We're continuing to work on multiple levels to ensure that projects that are in national interest like the Trans Mountain Pipeline expansion get built", says Trudeau.

The deal was approved by cabinet on Tuesday morning and is now subject to approval by Kinder Morgan stockholders. Again, all of this makes good financial sense for Canada but it's a bit surprising that Justin Trudeau is willing to directly challenge the environmental left to make this happen.

Both the federal government and the provincial government of Alberta, which would be the main beneficiary of the expansion, have made it abundantly clear they are behind the project, and yet neither has managed to budge B.C.'s government, even with the threat-by Alberta-to turn the current oil tap off.

Although the federal government has taken stakes in struggling energy projects, Tuesday's announcement marked the first time Ottawa has bought an entire pipeline.

Finance Minister Bill Morneau said the government would acquire the troubled pipeline expansion project on Tuesday.

May said Indigenous rights were not being respected in regards to the permits issued to twin the existing pipeline.

The purchase marks a stunning development for Trudeau's government - effectively nationalizing the country's highest-profile infrastructure project until an operator can be found.

Calgary-based Kinder Morgan Canada, a unit of the Houston-based parent, was little changed at C$16.59 in Toronto trading Monday, for a market value of C$5.76 billion.

If completed, Trans Mountain would "triple the amount of dirty tar sands being shipped from Alberta to the coast of British Columbia", OCI's Andy Rowell noted in a blog post last week.

Kinder Morgan set the deadline in part due to frustrations with delays caused by the British Columbia government, which is concerned about possible oil spills. Conservative Party Leader Andrew Scheer said Kinder Morgan wasn't asking for money but for "certainty" on how to build the pipeline.

The feds said that the investment represents a fair price for Canadians, and will allow the project to proceed under the ownership of a Crown corporation. The 980-kilometer (600-mile) expansion is seen by the oil industry as a crucial link to Asian markets, allowing producers to diversify away from the US, which takes the vast majority of Canadian oil exports.

Related Articles