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Canada to Buy Kinder Morgan Pipeline for $3.5 Billion

30 May, 2018, 11:18 | Author: Samuel Sharp
  • Darfield pump station

To help attract a future buyer for the pipeline, Morneau said, the government plans to "extend the federal indemnity to protect any new owner from costs associated with politically motivated delays".

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

Canada will purchase Kinder Morgan's TransCanada pipeline and related infrastructure in a C$4.5bn ($3.4bn; £2.6bn) federal investment.

In 2016, the B.C. provincial government said that it did not support the pipeline because Kinder Morgan did not provide a plans for oil spill prevention and clean up efforts.

Ottawa has the constitutional authority to build interprovincial projects like pipelines, but B.C. Premier John Horgan has gone to court to get a judge to weigh in on whether B.C.'s jurisdiction for the environment would allow him to regulate what flows through the pipeline.

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

Amid the feuding, the pipeline has become a barometer for foreign investments in Canada, with some warning of a spillover into other sectors of the economy.

Knaak stressed the importance of certainty in government process as it pertains to resource development, which he said is a necessary industry.

"And, it will reassure investors that Canada is a country that respects the rule of law and gets big, important things done", he added. "This is an opportunity for our young families to get training and jobs, to build homes and careers", said Chief Ernie Crey of the Cheam First Nation.

His Liberals face a hard balancing act in trying to champion climate action while supporting growth in Canada's oil sector.


None of those pipelines went "to tidewater", though - the two key words to listen for as Liberals and Tories squabble over these types of projects. It is also confident it will prevail in a Federal Court of Appeal challenge by some Indigenous communities over its approval of the pipeline, a ruling on which is due any day.

Until now, Trudeau's government has used a soft tone to try to convince British Columbia to abandon its opposition to the pipeline, hoping not to alienate voters in the province before next year's general election. "We have a pipeline to build".

Meanwhile, Green Party leader Andrew Weaver was much more critical of the federal government with his comments today.

Mr. Horgan said Mr. Trudeau's commitments to reconciliation with Indigenous peoples are coming to an unavoidable conflict with this pipeline.

Horgan told reporters in Victoria the federal government's takeover of the project changes the legal situation, but his contentious legal action isn't aimed at any specific project.

According to the University of Calgary's School of Public Policy, just one partial 100,000-barrel upgrader alone would increase the value of bitumen by $10 to $15 per barrel, end the need for diluent, free up pipeline capacity, and boost Alberta's GDP by $505 million.

Veteran B.C. NDP MP Nathan Cullen suggested Ottawa was prioritizing a pipeline over safe drinking water for Indigenous children on reserves.

Will George, a spokesman for the Tsleil-Waututh First Nation, which has led resistance to the project, said the federal takeover guarantees a broader coalition of opposition in the coming months.

The government does not intend to be the long-term owner of the pipeline, however, and has already begun speaking with interested parties about transferring ownership later on.

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