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Federal government will purchase Trans Mountain pipeline for $4.5B

30 May, 2018, 20:14 | Author: Sara Gill
  • Elizabeth May

"When we are faced with an exceptional situation that puts jobs at risk, that puts our global reputation on the line, our government is prepared to take action", Morneau told reporters. But the pipeline faces strong opposition in British Columbia, particularly in the Vancouver area.

The federal finance minister said the government does not plan to be the long-term owner of the pipeline and expects the project to be transferred to private sector investors "at an appropriate time".

Horgan said Tuesday he will continue with his reference case, launched this spring in the B.C. Court of Appeal to determine if the province can restrict heavy oil shipments and create new spill and cleanup funding rules.

Ms. Berman, a former adviser on oil sands development to Alberta Premier Rachel Notley, was scheduled to speak alongside Vancouver's Mayor Gregor Robertson and Indigenous leaders from across the country.

But just because the federal government stepped in to buy the Kinder Morgan Assets doesn't mean a cheque for Muskrat Falls is going to come from Ottawa anytime soon, according to Ball.

The finance minister says the move will "ensure" the oilsands pipeline expansion gets built.

"Canada's purchase may "'be a vehicle to indemnify the project against regulatory risk", Katie Bays, an analyst with Height Securities LLC in Washington, said in a telephone interview.

"Trudeau is gambling billions of Canadian taxpayer dollars on an oil project that will never be built", Mike Hudema, a climate and energy Campaigner at Greenpeace Canada, declared in a statement on Tuesday.

In return for the purchase, Kinder Morgan will go ahead with its original plan to twin the pipeline this summer while the sale is finalized, which isn't expected to happen until August, Morneau told the news conference in Ottawa.

Last month, about 200 protesters opposing the expansion were arrested for breaking a court injunction barring them from entering within five metres (16ft) of two Kinder Morgan terminals in Burnaby, BC. Notley said construction is to resume on the line within weeks. The Toronto-based alternative-asset manager already has a joint venture with Kinder Morgan, Natural Gas Pipeline Company of America, through its publicly traded Brookfield Infrastructure Partners.

Finance Minister Bill Morneau has hinted there'll be additional costs to the Trans Mountain project, but says they'll be defrayed by revenue generated by the pipeline itself.

After the government's announcement, the NDP indicated that its position remains the same.

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.

The ensuing uncertainty, paired with vociferous opposition from environmental groups and some Indigenous communities in B.C., prompted Kinder Morgan to halt investment until the federal government could inject some certainty into the project.

On Tuesday, Ottawa repeated its promise to provide indemnification "to protect any prospective new owner from costs associated with political delays". Its expansion is a key part of Canada's effort to boost oil exports to Asian markets - but the plan has been protested by indigenous groups and environmental activists, who warn of the risks of a spill and the hazards of increased petroleum tanker traffic.



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