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Five Things: the next steps for getting the Trans Mountain project done

Five Things: the next steps for getting the Trans Mountain project done

Bill Morneau, finance minister, announced on Tuesday the government will pay Kinder Morgan 4.5 billion Canadian dollars (US$3.5bn) for the Trans Mountain pipeline. The federal government and the Houston company were in talks for over a month about saving the project, which Kinder Morgan threatened to abandon as of Thursday unless federal officials remove political. "We won't stop until the job is done!"

"There is a very strong business case for this pipeline", Prime Minister Justin Trudeau told Bloomberg Television, saying the government takeover meant "a lot of the legal barriers and a lot of the challenge points actually disappear".

One man said he thought the project would be profitable for Canada.

Well, it certainly will if the government owns it, builds it ... and assumes all the financial risk, as Finance Minister Bill Morneau announced 90 minutes later at a news conference before the opening of stock markets. "It will help us build up the things that matter to working families, such as our schools and our hospitals".

"Whether she wins (the election) that's another story, but had this not happened, she was toast", said Bratt, a political scientist at Mount Royal University in Calgary.

Caisse de depot et placement du Quebec, Canada's second biggest public pension and Kinder Morgan Canada's biggest independent shareholder, has shown the most appetite for financing the construction of new infrastructure among Canada's biggest pension plans.

It takes a third of a barrel of imported light oil to move one barrel of bitumen through a pipeline.

In 2007, Kinder Morgan reported to the National Energy Board that it valued the Trans Mountain pipeline system at $550 million. The sale is expected to be finalized later this year, but the government plans to get construction moving shortly.

The purchase includes the pipeline, pumping stations, and rights of way along the route.

So while Kinder Morgan won't be owning it any more after the purchase closes at the end of July, they'll be supplying the talent to build it, at least in the short term.

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The news came days ahead of a May 31 deadline set by Kinder Morgan Canada - the company stopped investor spending and suspended non-essential activities related to the project in an announcement on April 8.

While he isn't happy about the federal government's decision to buy the pipeline project, Milobar said "it's understandable why government wants it to proceed and it will be good if the government gets it across the finish line".

Steel pipe to be used in the oil pipeline construction of Kinder Morgan Canada's Trans Mountain Expansion Project sit on rail cars at a stockpile site in Kamloops, British Columbia, Canada May 29, 2018.

The B.C. government is still fighting the project in court.

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

The crown will use the expertise and management of the employees acquired from Kinder Morgan to get the pipeline built.

The provincial government will continue to "defend British Columbia's interests within the rule of law", he said. Canada's Building Trades Unions lauded the "courage and vision" of the government and said Ottawa can expect to sell the pipeline in the future so that taxpayers won't lose out.

Currently, 99 percent of Canada's oil is sold to the United States at a discount, and access to the Pacific coast is seen as key to diversifying the world's sixth-largest oil producer's energy exports.

"He had an opportunity to walk away from pipeline politics and get on with the real work of leading Canada, and the world, in a 100 per cent renewable energy revolution, but instead he's opted to ignore science, Indigenous rights and the voices of people across Canada and bailed out a unsafe, unwanted pipeline with public money".


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