Power & Politics

Canada's purchase of Trans Mountain clears major U.S. hurdle

A U.S. national security review has given Canada's purchase of Kinder Morgan's Trans Mountain pipeline the thumbs-up. The federal government says all necessary regulatory approvals have been received to close the sale.

U.S national security review gives green light to government purchase

Canada's purchase of the Trans Mountain pipeline has cleared a major hurdle, getting a green light from a national security review conducted by Trump administration officials. (Andrew Harnik/Associated Press)

A U.S. national security review has given a green light to the Canadian government's planned purchase of Kinder Morgan's Trans Mountain pipeline project, moving the transaction one step closer to completion.

In July, CBC News reported that the deal was contingent in part on getting clearance from the Committee on Foreign Investments in the United States, also known as CFIUS.

The deal was subject to a CFIUS review because the purchase agreement includes the acquisition of the Puget Sound pipeline, a short spur line off the Trans Mountain system that transports Canadian crude oil from Abbotsford, B.C., to refineries in Washington state.

A spokesperson for Finance Minister Bill Morneau's office confirmed to CBC News Friday that CFIUS had approved the planned purchase.

"The required regulatory approvals necessary for the close of the sale have been received. The transaction is proceeding as scheduled, and construction activities are on track as detailed in line with the 2018 work plan," said Pierre-Olivier Herbert. "The Trans Mountain expansion is in the national interest and it must be built."

There had been fears that the CFIUS review could pose a serious threat to the deal because, in some instances, the committee would defer the approval of a purchase to the president of the United States. That raised the prospect of Donald Trump holding up the project to secure leverage in trade disputes with Canada.

The federal government announced at the end of May it had reached a deal with Kinder Morgan Canada to purchase the pipeline and related infrastructure for $4.5 billion, and that it could spend billions more to build the controversial planned expansion. Ottawa said it was taking the unusual step of buying into the project in order to ensure the expansion's completion in the face of intense political opposition in British Columbia.

The Trans Mountain expansion will build a new pipeline roughly parallel to the existing, 1,150-kilometre line that carries refined and unrefined oil products from the Edmonton area to Burnaby, B.C.

It will nearly triple the line's capacity to 890,000 barrels a day. Trans Mountain is the only pipeline carrying Alberta crude to the West Coast, and the hope is that most of the oil will end up in tankers bound for Asia.

With files from Katie Simpson

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.