If Kinder Morgan bails, feds would back new investors: Morneau
Finance minister says government will ‘provide indemnity’
OTTAWA — If Kinder Morgan wants to abandon plans to expand the Trans Mountain pipeline, there are plenty of other investors willing to take up the cause — and the federal government will back them, Finance Minister Bill Morneau says.
The government is willing to “provide indemnity” to any investors, be they the project’s original architects or otherwise, to ensure the controversial Alberta-B.C. project is able to proceed, Morneau told a news conference Wednesday.
The announcement, coming on the very day when the company’s Calgary-based Canadian operation is scheduled to hold its annual meeting, bore the hallmarks of an effort to ratchet up the pressure in advance of Kinder Morgan’s May 31 deadline.
Amid mounting opposition from the B.C. government, environmental groups and protesters, not to mention skittish investors, the company last month halted all non-essential spending on its $7.4-billion plan to double an existing pipeline between Edmonton and Burnaby, B.C.
“We are willing to indemnify the Trans Mountain expansion against unnecessary delays that are politically motivated,” Morneau said — a reference to B.C. Premier John Horgan’s ongoing refusal to allow the project to proceed, despite federal jurisdiction.
“If Kinder Morgan is not interested in building the project — we think plenty of investors would be interested in taking on this project, especially knowing that the federal government believes it is in the best interest of Canadians and is willing to indemnify to make sure it gets built.”
He said investors need certainty in order to back a project that the government has repeatedly insisted is in the national interest, but steadfastly refused to say what sort of dollar figures are currently on the table.
Morneau did not directly answer when he was asked how other investors or companies might take over a project to expand an existing pipeline that already has an owner.
“This pipeline that Kinder Morgan currently has, the Trans Mountain pipeline, has been there since 1953, so we see that the twinning of that pipeline is one of the most effective ways to get our resources to market responsibly,” he said.
“We see a path to an outcome that will assure that we can get the advantage that we’re seeking; that’s why those discussions are ongoing. We do know that in order to make sure that we have that path, we need to deal with the extraordinary risks that have been presented by Premier Horgan.”
Steve Kean, Kinder Morgan Canada’s chair and CEO, reiterated the company’s position.
“We remain steadfast in our previously stated principles: clarity on the path forward, particularly with respect to the ability to construct through British Columbia, and ensuring adequate protection of our KML shareholders,” Kean said.
“While discussions are ongoing, we are not yet in alignment and will not negotiate in public.”
Morneau’s talks with Kinder Morgan had their genesis a month ago, when Trudeau promised to deploy both financial and legislative tools to ensure the expansion is able to proceed.
Trudeau convened a summit in Ottawa last month with B.C.’s John Horgan, who has staked his government’s survival on opposing the pipeline, and Alberta Premier Rachel Notley, whose province’s economic health depends on it.
Trudeau instructed Morneau to sit down with Kinder Morgan to find a financial solution that would soothe their investors. He also promised legislation that would reaffirm Ottawa’s authority to press ahead with a development deemed to be in Canada’s national interest.
Finance Minister Bill Morneau leaves a press conference after speaking about the Trans Mountain Expansion project in Ottawa on Wednesday.