Pipeline price could change before deal is done
The price of the Trans Mountain pipeline deal isn’t set in stone, according to the contract between Kinder Morgan and the federal government.
The final price tag shouldn’t be far off the $4.5-billion figure announced by Ottawa last week.
However, it all boils down to a “good faith best estimate” of working capital costs, prepared by auditors and provided to the government at least five days before the deal closes. Adjustments could go either up or down.
The contract also allows Kinder Morgan to entertain other acquisition proposals that give its shareholders a better deal.
But there’s a caveat — such a deal would have to be acceptable to the federal government and include commitments to finish the pipeline expansion.
Those are just some of the details in the 121-page agreement laying out the nitty-gritty of the Trans Mountain deal.
Others include legal requirements for both parties, taxes, warranties, intellectual property rights and implications for Kinder Morgan employees.
As one might expect for a multibillion-dollar transaction, the contract delves deep into the in’s and out’s of who, what, where and when.
There’s even a clause about name changes.
The federal government will have 90 days to erase the name “Kinder Morgan” from facilities, and 180 days to get it off signs. Similarly, Kinder Morgan has 30 days to eliminate the use of “Trans Mountain” from its corporate vocabulary.
There are no provisions for new employee bonuses, golden handshakes, retirement or other enhanced benefits. New contracts must take into account how long they ’ve worked for Kinder Morgan with salaries equal to what they currently earn.
The deal was signed by Kinder Morgan chief financial officer Dax Sanders and federal Finance Minister Bill Morneau.
Alberta Party member for Calgary-Elbow, Greg Clark, raised the federal contract during question period at the Alberta legislature Wednesday, after his party got its hands on the document.
He wanted to know whether Premier Rachel Notley would release Alberta’s part of the deal for public scrutiny.
Notley said she would be happy to — subject to commercially sensitive information concerns — once the ink is dry.
“We’re pretty clear that we’re going to be releasing the whole thing,” she said.
“It was a fundamental element of our engagement that what we did would be absolutely transparent to the people of Alberta, and we are committing to ensuring that that’s exactly what happens.”
Notley also said no Alberta taxpayer dollars would be going to British Columbia as part of the deal.