Cost to twin Trans Mountain pipeline could go $1.9B higher, Kinder Morgan says
Pipeline to West Coast now projected to be completed by December 2021
Kinder Morgan Canada documents say expanding the Trans Mountain pipeline could cost the federal government an additional $1.9 billion beyond the company's original construction estimate, and will take another year to complete.
The figure is included in documents Kinder Morgan Canada filed Tuesday with the United States Security and Exchange Commission related to the company's plan to sell the pipeline to the Canadian government for $4.5 billion.
Kinder Morgan has long said it would cost $7.4 billion to build a second pipeline parallel to the first in order to triple its capacity, but the financial documents present a number of different construction cost scenarios, with the highest one being $9.3 billion.
The documents also suggest construction won't be complete until December 2021 — a full year beyond its previous projection of December 2020.
Reluctant to talk
Finance Minister Bill Morneau has been reluctant to talk about how much more it will cost to build the pipeline while the deal is being finalized.
An official in Morneau's department, speaking on background because he was not authorized to speak publicly, said the numbers do not specifically reflect the government's expectation of what the final project cost will be.
However, Robyn Allan, an independent economist and former CEO of the Insurance Corporation of British Columbia, said Kinder Morgan wouldn't evaluate the fairness of the sale based on numbers that have no bearing on reality.
Allan, who said she has expertise on a number of multibillion-dollar infrastructure projects, believes that, in the end, $9.3 billion will seem like a steal compared to the final price tag.
"This is the least it's going to cost," said Allan.
Allan said the only detailed information Canadians have about the particulars of the sale is due to investor laws in the United States and Canada that require Kinder Morgan to file documents outlining the specifics of the deal.
Since taxpayers are the shareholders of the project now, she said Canadians deserve the same level of disclosure from Ottawa and they aren't getting it.
Awaiting shareholder vote
Morneau's official said that as soon as construction contracts are in place, the government will freely release an official cost update, which he said should happen no later than next winter.
The documents also say shareholders will meet Aug. 30 in Calgary to vote on the proposed sale.
The initial goal to finalize the sale in August has been delayed until September or October pending the Aug. 30 shareholder vote results.
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