Canada to buy Kinder Morgan oil pipeline in bid to save project


John Horgan addressed media at the legislature Tuesday morning on the heels of federal finance minister Bill Morneau's earlier announcement that Ottawa plans to buy the project, along with Kinder Morgan Canada's core assets, for $4.5 billion.

The transaction on which the federal government and Kinder Morgan agreed upon on Tuesday is expected to close in August 2018.

The announcement was made by Canada's finance minister, Bill Morneau, who called the proposed purchase "an investment in Canada's future". "They are getting a very good value", said Paul Bloom at Bloom Investment Counsel Inc, which owns about 300,000 shares in Kinder Morgan Canada.

While Mr. Morneau claimed the pipeline is the safest and most effective way to get natural resources to world markets, the truth is there is little, if any, demand for oil sands bitumen in Asia.

He said it threatens Canada's reputation as a safe place to invest, puts thousands of jobs at risk and holds back Canada's economic growth.

British Columbia insists the sale of Kinder Morgan Inc.'s pipeline to Canada's federal government won't sway its opposition to a project seen as a lifeline to the nation's oil industry.

The Trans Mountain expansion is projected to lead to a tanker traffic balloon from about 60 to more than 400 vessels annually as the pipeline flow increases from 300,000 to 890,000 barrels per day.

"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".

"Governments do a lot of things right, but running businesses is probably not near the top of the list", Wall said.

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"It's not the intention of the government of Canada to be a long-term owner of the project", Morneau said, adding that pension funds and indigenous groups have already expressed an interest in buying stakes in the project.

Alberta Premier Rachel Notley cheered the news of the federal government's purchase on Twitter.

Canadian Association of Petroleum Producers president Tim McMillan said it was "great news" that Ottawa was prepared to "step up to clear the path to construction" and ensure Trans Mountain had full political and financial support.

Presumably, the cost to the new owners - us - will be about the same.

The pipeline has become a flash point for a wider debate in Canada over the environmental impact of tapping Alberta's oil sands, which critics view as a particularly polluting energy source.

Despite his vocal support for the project, Moe said Saskatchewan will not pick up the tab for any construction costs because the project carries Alberta oil.

A Finance Department official says that as a Crown project in the national interest, Canada has special allowances to proceed that may not be available to a private-sector company.

Conservative Leader Andrew Scheer is accusing Justin Trudeau of "trying to buy his way out of a problem" after the government announced a deal to buy the Trans Mountain pipeline assets from Kinder Morgan for $4.5 billion.