Published: Tue, May 29, 2018
Science | By Joan Schultz

Canada to buy Kinder Morgan pipeline project assets

Canada to buy Kinder Morgan pipeline project assets

The Government of Canada has reached an agreement with Kinder Morgan to buy the Trans Mountain Expansion Project and related pipeline and terminal assets for US$3.5 billion (C$4.5 billion), as the federal government stepped in to save the project after British Columbia's fierce opposition to the project was threatening to derail it.

Mr Morneau said the deal with Kinder Morgan is likely to be closed by August 2018.

Morneau presented the options during an early-morning cabinet meeting today before ministers made a decision on how to proceed.

"So our message today is simple: 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", he said.

Opponents of the Kinder Morgan project are concerned over the environmental impact of extracting more fossil fuels from Alberta's oil sands and the possibility of an oil tanker spill in Canada's Pacific waters.

The purchase from owner Kinder Morgan will ensure work can resume on the Trans Mountain expansion.

The federal government has been in talks with the Texas-based energy infrastructure company for weeks over the future of its controversial Trans Mountain expansion.

Alberta Federation of Labour president Gil McGowan said he's impressed with the federal government for "taking decisive action".

"As part of the agreement, the Government of Canada has agreed to fund the resumption of TMEP planning and construction work by guaranteeing TMEP's expenditures under a separate Federal Government recourse credit facility until the transaction closes", Kinder Morgan said.

But the pipeline faces legal and regulatory challenges from BC that has delayed construction of the project. "Worst of all, the cost and risk of a $7 billion project that was going to be willingly financed entirely by a private company will now be unnecessarily transferred onto the backs of Canadian taxpayers".

Greenpeace Canada's Mike Hudema tweeted "Good-bye climate and Indigenous rights commitments Canada and hello Massive losses".

Dozens of people have been arrested for protesting against the project, which has been approved by the federal government.

Financing will come from Export Development Canada.

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