Kinder Morgan begins negotiations with Ottawa to save pipeline project
Company says Trans Mountain expansion 'is now facing unquantifiable risk'
Kinder Morgan's chief executive told investors on Wednesday afternoon that negotiations with the federal government are underway to strike a deal and salvage the Trans Mountain expansion project, which continues to face opposition from the B.C. government.
Prime Minister Justin Trudeau announced on Sunday that his government could offer financial assistance to the Texas-based company and use legislation that would give Ottawa total control over the $7.4-billion project, which would stretch from Edmonton to the Vancouver area.
"Most of the investment is in British Columbia, where the government is in opposition to the project and has looked for and found ways to incrementally regulate it. That is an issue, in our view, that has to be resolved or addressed in order to successfully construct in the province," said CEO Steven Kean on the conference call.
Investors asked several questions about what kind of deal the company was pursuing, but executives were tight-lipped.
"There's really nothing more to add," said Kean. "There has to be a way to build through B.C., and there has to be a way to protect our shareholders, and we are in discussions."
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Currently, the company describes the proposed pipeline as "facing unquantifiable risk" because the B.C. government is "asserting broad jurisdiction and reiterating its intention to use that jurisdiction to stop the project."
Hours before Kean spoke to investors on a conference call, the B.C. government announced it would file a legal challenge in the provincial Court of Appeal in the next few weeks to determine if it has jurisdiction over the Trans Mountain pipeline expansion project.
The filing is B.C.'s latest move to oppose and delay the project.
"This process is about B.C.'s right under the Constitution to regulate against the deleterious impacts on the environment, on the economy, on the provincial interests — whether it's an inter-provincial project or a provincial project," said B.C. Environment Minister George Heyman.
This week, the Alberta government introduced legislation to restrict shipments of oil and other fuels to B.C. in order to drive up fuel prices.
"There's a lot of back and forth going on, and it's in a political realm, and it's not something I feel particularly qualified to gauge for you," said Kean to an investor question about the potential impact. "I'm not even going to try and interpret it."
Earlier this month, Kinder Morgan announced it was suspending work on the Trans Mountain pipeline expansion and could terminate the project if arrangements aren't made by May 31. The company wants a way to build through B.C. and find protection for its shareholders.