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Notley praises $4.5 billion pipeline purchase plan

30 May 2018
Notley praises $4.5 billion pipeline purchase plan

Kinder Morgan Canada's shares rose rough 3% in early Tuesday trading as the federal government unveiled its big-budget strategy to save its planned expanse to the Trans Mountain pipeline.

"We said we would get the pipeline built and we are getting it built", she said, flanked by her celebratory caucus at a news conference overlooking the Alberta Legislature.

"We'll probably be able to roll out those details, that information, a bit more in the days to come but I'm not going to do it today", said Notley, who noted the province may end up putting no money toward the project. We met the deadline.

The provincial government in oil-producing Alberta will create an emergency fund of as much as C$2 billion for the project, which would only be used in "unforeseen circumstances".

"If you think about the dozens of pipelines that exist for crude oil, natural gas liquids, natural gas itself, petroleum products, all throughout the USA and Canada - and we track this stuff - I'm not aware of a single one that's owned by any government entity ... not on this scale".

She said the deal announced before markets opened Tuesday would also provide a boost to the Canadian energy industry - both for producing companies and the outlook for domestic crude oil prices.

Notley had a different take - that Horgan's government has been deliberately harassing the project. Kinder Morgan Canada and the federal government will spend the next eight weeks jointly trying to find another buyer for the pipeline. The questions those court actions seek to answer - from First Nations title and consultation issues, to B.C.'s own case on the environmental review process and ability to protect its coast - are still lingering over the project, May added. The government is buying the existing pipeline and the scheduled twinned pipeline expansion.

"We've always reckoned that the Trans Mountain expansion was logical in terms of, if you build the pipeline, the volumes will flow through it".

Horgan said the federal government's decision to take over the project puts Ottawa in charge of managing every aspect of the pipeline, including its risks.

Once the sale is complete later this summer, Canada will continue construction on its own.

"The announced sale by Kinder Morgan credit positive for Kinder Morgan Inc.", said Moody's Investors Service's Terry Marshall, senior vice president.

Calling a controversial pipeline expansion "a vital project in the national interest", Canadian Prime Minister Justin Trudeau says his government is buying the Trans Mountain pipeline to ensure that the expansion is built, despite protests from environmentalists and other groups.

Kinder Morgan had set a May 31 deadline for the political uncertainty around the pipeline to be resolved or it was prepared to walk away from the project.

Export Development Canada will finance the purchase, which includes the pipeline, pumping stations and rights of way along the route between Edmonton and Vancouver, as well as the marine terminal in Burnaby, B.C., where oil is loaded onto tankers for export. If Canada buys the pipeline, it will also acquire the personnel needed to continue with construction.

"John Horgan picked a fight with Alberta and provoked a constitutional crisis with Ottawa over this project and this is now the embarrassing result", Wilkinson said. Two months later, the B.C. government, then led by premier Christy Clark's Liberals, gave approval to the project.