Kinder Morgan suspends all non-essential spending on pipeline expansion

Kinder Morgan suspends all non-essential spending on Trans Mountain Expansion

Pipeline/Shutterstock

Kinder Morgan Canada Limited, the company in charge of the $7.4 billion Trans Mountain Pipeline expansion, stated in a release this weekend that it would be suspending all non-essential spending on the project.

The decision comes after a long-standing dispute between British Columbia Premier John Horgan and Alberta Premier Rachel Notley, which began in late January when the BC provincial government announced that it would be restricting the increase of bitumen transported out of BC’s shores, essentially stalling the pipeline expansion.

Notley answered back throughout February by suspending talk of electricity purchases from BC and boycotting all BC wine imports into Alberta.

While Alberta eventually lifted the wine boycott, Horgan stated that his government would be going to court to determine if they can lawfully halt the project by moving forward with consultations around four bitumen spill safeguards.

Now, in the shadow of uncertainty cast by Horgan’s government, Kinder Morgan has eased off on construction, deeming it too risky an investment for shareholders as long as the governments continue to dispute the expansion’s legality.

“While we are prepared to accept the many risks traditionally presented by large construction projects, extraordinary political risks that are completely outside of our control and that could prevent completion of the project are risks to which we simply cannot expose our shareholders,” Kinder Morgan chairman and CEO Steve Kean said in an April 8 release.

“A company cannot resolve differences between governments. While we have succeeded in all legal challenges to date, a company cannot litigate its way to an in-service pipeline amidst jurisdictional differences.”

Kinder Morgan has set a May 31 deadline, before which it plans to consult with stakeholders as well as give the federal and provincial governments time to come to an agreement.

“If we cannot reach agreement by May 31, it is difficult to conceive of any scenario in which we would proceed with the project,” Kean said in the release.

See also