Notley praises $4.5 billion pipeline purchase plan as 'major step' for Albertans

Theresa Obrien
May 29, 2018

If the project does eventually complete, the pipeline expansion will nearly double Canada's production capacity in the pacific oil markets from 300,000 barrels per day (bpd) to 590,000bpd. A lack of capacity in pipelines or in rail cars to ship oil produced in Alberta is also hurting Canada's energy sector.

Kinder Morgan Canada Ltd.'s shares lurched higher, then fell, after the federal government announced early Tuesday it would buy its Trans Mountain pipeline assets for $4.5 billion. "I think that's been reinforced by the fact that Kinder Morgan was able to build up through different open seasons to a high level of commitment (from shippers)", he said. The deal, which includes the expansion, related pipeline and terminal assets, is expected to close in August.

The Canadian federal government will likely have a hard time selling the Trans Mountain pipeline system it purchased for $4.5-billion on Tuesday until it can show the risks to the project have been reduced. Kinder Morgan had paused non-essential spending on the project over disputes between provincial governments in Alberta and B.C.

"For too long we have relied on one trading partner for our oil and gas exports", Natural Resources Minister Jim Carr said. Canada has the world's third largest oil reserves but 99 percent of its exports now go to refiners in the US, where limits on pipeline and refinery capacity mean Canadian oil sells at a discount.

"If you think about the dozens of pipelines that exist for crude oil, natural gas liquids, natural gas itself, petroleum products, all throughout the USA and Canada - and we track this stuff - I'm not aware of a single one that's owned by any government entity ... not on this scale". The federal cabinet approved the purchase on Tuesday.

"We've agreed to a fair price for our shareholders and we've found a way forward for this national interest project", he told a conference call with financial analysts. Trudeau pledges regularly that the pipeline will be built.

Now 99 percent of Canada's oil is sold to the United States at a discount, and access to the Pacific coast is seen as key to diversifying the world's sixth largest oil producer's energy exports.

Subtropical Storm Alberto forms over the northwestern Caribbean Sea
Dan Kottlowski, hurricane expert for AccuWeather, said he expects the weather system to turn into a named storm by the weekend. The first named storm of 2018 in the Atlantic Ocean has developed in the western Caribbean, and its name is Alberto.


Gini Wijnaldum shows he gets Liverpool with approach to Champions League final
Knowing Liverpool as a club, the people I had spoken to about Liverpool also, I knew Liverpool belongs to the Champions League. But in the end, the manager [Vicente del Bosque] decided to choose another team and I had to respect that.


Movie producer Weinstein to surrender on sex assault charges
Despite reporting the incident to the NYPD immediately, Vance's office declined to file charges after two weeks of investigation. Weinstein has denied any wrongdoing, and his lawyer indicated Friday that the movie mogul is pleading not guilty to the charges.


Horgan said federal ownership of the pipeline won't alter his government's actions, because the reference case to try and regulate the import of oil into the province is not specific to any pipeline.

But Morneau said the Alberta-British Columbia feud - which led Alberta to boycott British Columbia wines and threaten to cut the neighboring provinces fuel supplies - "cannot be allowed to fester".

On Tuesday morning, Finance Minister Bill Morneau announced Ottawa would spend $4.5 billion to buy the pipeline expansion, and all of Kinder Morgan Canada's core assets.

Alberta Premier Rachel Notley cheered the news of the federal government's purchase on Twitter.

Morneau's announcement immediately prompted more protest vows to resist the project in the name of preventing offshore oil spills and stopping thermal tar sands production blamed for increasing Canadian carbon emissions.

"Our government believes that the commercial agreement we have reached with Kinder Morgan is the best way to protect thousands of good, well-paying jobs while delivering a solid return on investment for Canadians".

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER