Latest
Recommended
Published: Fri, June 01, 2018
Research | By Jennifer Evans

Canadian government purchases Trans Mountain pipeline for $4.5 billion

Canadian government purchases Trans Mountain pipeline for $4.5 billion

Stetski also said the money could have been spent on green energy projects, or the construction of a refinery in Canada so that raw bitumen doesn't need to be shipped overseas and jobs could be created in the country. The almost tripled volume of oil carried by the pipeline and the increase of ships needed to transport the crude oil at the Pacific will also heighten the threat to fish, orca whales, and other wildlife intrinsic to local people's livelihood. "Canada has no hope of joining in the global carbon dioxide reduction plan if we build this pipeline".

The company also faced opposition from environmentalists and aboriginal groups who anxious about the pipeline spilling its tar-like heavy oil. "The federal government wants this Trans Mountain project to go ahead at all costs - even to the point of investing in it - and we couldn't even get regulatory approvals".

He said the pipeline purchase provided the federal jurisdiction needed to overcome British Columbia's opposition, but gave no details of how this would work.

Ottawa could also deploy the police and troops to maintain a barrier between protesters and construction workers.

"The taxpayer is going to end up losing billions of dollars here", Jeff Rubin, senior fellow at the Waterloo-based Centre for International Governance Innovation, said by phone Tuesday after the purchase was announced.

Ottawa has said it does not intend to own the project in the long-term.

Scott McBride, of Nanaimo, B.C., holds a caricature of Prime Minister Justin Trudeau during a protest against the Kinder Morgan Trans Mountain pipeline expansion in Burnaby, B.C., on Saturday March 10, 2018. The sale, which must still be approved by Kinder Morgan Canada shareholders, is expected to close in the second half of the year.

It expects its approximately 30 per cent share of after-tax proceeds to be about $1.25 billion.

"It's a mess out there", said a Calgary industry source not authorized to speak publicly. "There have been expressions of interest from a variety of places, but we'll see".

"We are able to pursue this project with confidence, because we know that we are upholding the trust Canadians have placed in us to both grow our economy and protect our environment", Mourneau stated.

Kean did not say why he chose to sell rather than absorb the risk of further delays.

"I think the transaction is a win-win".

Kinder Morgan Canada (TSE:KML) last posted its quarterly earnings results on Wednesday, April 18th. Kinder Morgan Canada had a return on equity of 3.58% and a net margin of 25.27%.

The federal government has repeatedly said the project is in the national interest. The existing Trans Mountain line has been operating since the 1950s, carrying as much as 300,000 barrels a day of oil and refined fuels from Alberta to the Vancouver area, where it connects with a line carrying crude to refineries in Washington state.

British Columbia's Premier John Horgan told broadcaster Global News on Wednesday that he "rejected" the idea that his relationship with the federal government has deteriorated over the dispute.

Like this: