Business

Kinder Morgan 'open to' Alberta investing in pipeline

Kinder Morgan Canada's CEO Steve Kean says he is open to the idea of discussing Alberta investment in the Trans Mountain pipeline.

Cloud cast over future of the $7.4-billion Trans Mountain project

Alberta Premier Rachel Notley says Alberta 'is prepared to be an investor in the pipeline.' Kinder Morgan CEO Steve Kean says he's open to the discussion. (Jason Franson/Canadian Press)

Kinder Morgan Canada is open to discussing the idea of having the Alberta government invest in the controversial Trans Mountain pipeline expansion.

Premier Rachel Notley first raised the idea on Sunday in responding to the news that Kinder Morgan is suspending all non-essential spending on the project while it seeks to reduce the risk to its shareholders.

"Alberta is prepared to do whatever it takes to get this pipeline built — including taking a public position in the pipeline," Notley told a press conference. "Alberta is prepared to be an investor in the pipeline."

Kinder Morgan Canada's CEO Steve Kean, speaking to analysts on Monday, said he was open to the idea but added that the company would still need clarity on being able to build through B.C. and ensure protection for shareholders from further risk.

"It's a possibility," Kean said. "I saw those comments and we're open to that discussion."
Chris Bloomer calls on the federal government to ensure the expansion of Trans Mountain. 0:47

Kinder Morgan Canada announced Sunday it is suspending non-essential activities and related spending for the Trans Mountain pipeline expansion, casting a cloud over the future of the $7.4-billion project.

The company said it would still try to get agreements that would see the project advance, but would need to do so by May 31 or "it is difficult to conceive of any scenario in which we would proceed."

In Monday's conference call, Kean said Kinder Morgan Canada has been advancing the pipeline expansion for five years and "we still don't have the clarity that we need."

While he thanked the federal, Alberta and Saskatchewan government for their support, Kean said B.C. has consistently opposed the project, now with actions and not just words.

For one, B.C. Premier John Horgan is pursuing a reference case in the courts to determine if his government can control the shipment of oil through the province on environmental grounds.

"A private party simply doesn't have the power to resolve differences between governments," Kean said.

"We've been successful in our court actions to date but we can't build a project in the court house."

Kean said people shouldn't interpret Sunday's decision to reflect a broader view on investment in Canada. He said he expects to continue investing in Alberta and B.C.

"But is has been clearer that this particular investment may be untenable for a private party to undertake," Kean said.

Asked what kind of clarity — from either the federal or B.C. government — the company would need to proceed with the expansion, Kean said it was hard to know precisely.

"Essentially what we need to see there is that we're going to be able to ... efficiently construct through British Columbia without the threat of additional or new requirements being imposed, or proposed, or announced, that would create further uncertainty," he said.

As Kean made his remarks, the impact of the company's decision continued to ripple across Canada's business and political landscape.

The Canadian Energy Pipeline Association (CEPA) said it was deeply concerned by the news and joined the chorus of project supporters who are demanding that the federal government do more.

"CEPA calls on the federal government to use 'every tool in the toolbox' to ensure the expansion by Trans Mountain," said Chris Bloomer, the organization's president, in a statement. 

"The project is now at a critical juncture where immediate concrete actions by the federal government are needed to ensure absolute certainty that the project will be built."

Martin Pelletier, chief investment officer at Trivest Wealth Management, said the message sent by Kinder Morgan's decision is that the Canadian government doesn't support the energy industry.

Prime Minister Justin Trudeau responded to the news on Sunday by again insisting that the Trans Mountain expansion will be built.

"Canada is a country of the rule of law, and the federal government will act in the national interest," Trudeau said on social media. 

But Pelletier said the federal government is going to need to do more than talk tough to remove the barriers that will allow the project to move ahead.

"What does that involve? I don't know. And that's what makes the job very difficult for the federal government to do. But they're going to have to do something in order to provide that clarity and it's going to be more than just dollars as per what the Alberta government is proposing for example."
 

With files from Meegan Read