‘This will be a core piece of infrastructure for Canada’

“Unfortunately, we’re left with no options. If it weren’t for this announcement today, we would clearly have Kinder Morgan pulling out,” said Kenney, who wants a harder line against the British Columbia government, with Alberta restricting energy supplies to the province and Ottawa withholding transfers.

Kinder Morgan had set a May 31 deadline for the political uncertainty around the pipeline to be resolved or it was prepared to walk away from the project.

The Trans Mountain expansion has faced fierce opposition from environmental groups and some British Columbia First Nations and municipalities. B.C.’s NDP government has said it will use all tools at its disposal to try to stop the project, which has meant mainly a reference case to the province’s Supreme Court to determine whether the province has the jurisdiction to block increased bitumen shipments.

Premier John Horgan said Tuesday that federal ownership of the pipeline makes no difference to his province’s concerns and the court case will continue.

For Alberta, the expansion of the Trans Mountain line to Vancouver is crucial to open up new markets for Alberta’s oilsands crude and achieve better pricing.

Notley said the federal decision will “unlock” investment in the oilpatch.

Federal Natural Resources Minister Jim Carr was also vague about how Alberta’s commitment might kick in, saying that “we’ll be working that out in conversations down the road.”

Carr said Kinder Morgan will continue to own Trans Mountain and oversee construction until later in the summer, with the sale likely to conclude in August. While the Liberal government is prepared to continue construction, it wants to find a buyer in short order.

“The government of Canada has no interest in being the owner of this pipeline in the long term,” Carr told Postmedia Tuesday.

The price tag for the Trans Mountain expansion has been pegged at $7.4 billion, but Carr would not say whether that figure was accurate. He noted the pipeline already generates significant revenue.

But Ottawa is prepared to indemnify a new owner against expenses related to political risks, just as it was prepared to financially protect Kinder Morgan from politically prompted delays.

Canadian Association of Petroleum Producers president Tim McMillan said it was “great news” that Ottawa was prepared to “step up to clear the path to construction” and ensure Trans Mountain had full political and financial support.

But he said the situation should never have reached a point where nationalization was required and it is critical that Trans Mountain ultimately ends up back in the hands of a private company.

“This will be a core piece of infrastructure for Canada and knowing the pipeline business is going to be crucial to its success,” he said in a Calgary news conference.

Pipeline giants TransCanada Corp. and Enbridge weren’t commenting Tuesday. Morneau said “many investors have already expressed interest in the project,” citing Canadian pension funds and Indigenous groups as potential sources of financing.

Mayor Naheed Nenshi said other options would have been preferable but the Liberal government did the right thing.