Kinder Morgan to proceed with Trans Mountain pipeline expansion pending financing
Despite B.C.'s uncertain political future, Kinder Morgan says construction will begin in September
Kinder Morgan says it will proceed with the $7.4 billion Trans Mountain pipeline expansion as long as it secures satisfactory financing for the project through its initial public offering.
The Texas-based company, in conjunction with its indirect subsidiary Kinder Morgan Canada, announced Thursday its final investment decision on the project, which is conditional on the successful completion of the IPO.
The company has offered 102.9 million shares at a price of $17 per share in an effort to raise $1.75 billion. The public offering is set to close May 31.
The IPO would be one of the biggest ever on the Toronto Stock Exchange and Kinder Morgan spokesman Dave Conover says the company is confident it will be a success.
We're confident that we can work with whether it's a Clark minority government or a new coalition government.- Dave Conover, Kinder Morgan spokesperson
Conover said the timing of the public offering wasn't intended to coincide with B.C.'s provincial election which has created political uncertainty.
The process is proceeding because the project's financing contingency period, as specified in shipper agreements, concludes at the end of May.
B.C. election results create uncertainty
B.C.'s election has left the anti-pipeline Greens holding the balance of power in a minority situation in the legislature, raising concerns they will use their influence to persuade whichever party forms the government to take measures to block the project.
The Liberals and NDP are in negotiations with the Greens.
"We're confident that we can work with whether it's a Clark minority government or a new coalition government," Conover said. "I'm sure that we'll be talking to all three of the parties as the months unfold."
Green Leader Andrew Weaver has previously said the party believes it has a responsibility to stop the federally approved project, which would triple the shipment capacity of Alberta oil products to British Columbia's coast.
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Alberta's securities regulator is also reviewing Kinder Morgan's regulatory filings after a request from Greenpeace, which said it believes the documents overestimate growth in Asian oil demand and don't go far enough in disclosing risks related to climate change.
The project does have the support of Alberta Premier Rachel Notley, who has said opponents of the pipeline expansion have no power to stop it nor should they hold hostage the economy of another province.
Despite the opposition, Conover said the federal government, which has the authority to approve the project, already provided the necessary go-ahead last year.
B.C.'s Liberal government also negotiated a 20 year revenue-sharing agreement worth about $1 billion with Kinder Morgan before the election.
Conover said a new provincial government would have to take "pretty significant actions to repeal or override" the existing agreement.
Instead, he said he's confident the company can address any concerns about the construction, safety or environmental implications of the project a new government may have within the existing framework.
Kinder Morgan says it's expecting to begin construction for the project in September, with a completion date set for December 2019.