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Federal Government to buy Trans Mountain Pipeline from Kinder Morgan for $4.5B

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Yasmin Aboelsaud May 29, 2018 6:47 am 10,299

The Liberal Government announced it has agreed to purchase the Trans Mountain Pipeline system and the expansion project (TMEP) for $4.5 billion from Kinder Morgan.

According to the agreement, the two parties will work with the board to seek a third party buyer for the system and the expansion through July 22, 2018.

The feds said that the investment represents a fair price for Canadians, and will allow the project to proceed under the ownership of a Crown corporation.

The transaction is expected to close in August 2018.

The Trans Mountain Expansion Project involves building a new pipeline along the existing Trans Mountain Pipeline running from Edmonton, Alberta to Burnaby, British Columbia, and expanding the capacity of the terminal in Burnaby.

This expansion will increase daily capacity from 300,000 to 890,000 barrels, while improving market access to the US Pacific Coast and Northeast Asia, according to the government, who also state that they don’t intend to be the long-term owner of the project.

“At the appropriate time, Canada will work with investors to transfer the project and related assets to a new owner or owners, in a way that ensures the project’s construction and operation will proceed in a manner that protects the public interest,” reads a release.

Bill Morneau, Minister of Finance, said that this is an investment in Canada’s future.

“Our government believes that the commercial agreement we have reached with Kinder Morgan is the best way to protect thousands of good, well-paying jobs while delivering a solid return on investment for Canadians.”

In the course of the federal review of the project, the Government said it consulted 117 potentially affected Indigenous rights holders for four additional months, marking the deepest federal consultations ever done on a major project.

 

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Yasmin Aboelsaud
Toronto City Editor, fueled by coffee, travel & Drake.

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