Kinder Morgan’s Board of Directors has agreed to sell the Trans Mountain Pipeline System and the planned expansion to the Canadian Federal Government for CA$4.5 billion (US$3.5 billion).
Trans Mountain is a 1,150 km pipeline that runs between Strathona County, Alberta and Burnaby, British Columbia.
As part of the agreement, the government has agreed to fund the resumption of planning construction of the CA$7.4 billion (US$5.7 billion) expansion – which would increase the pipeline’s capacity from 300,000 bbl/d to 890,000 bbl/d – by guaranteeing the project’s advances under a separate Federal Government recourse credit facility until the transaction closes.
Kinder Morgan said it would to work with the government to seek a third party buyer for the Trans Mountain Pipeline system and the planned expansion until 22 July 2018.
The company expected both parties to close the transaction late in the third quarter or early in the fourth quarter of 2018, subject to the company’s shareholder and applicable regulatory approvals.
“Today, we’ve taken action to create and protect jobs in Alberta and British Columbia and restart construction on the Trans Mountain Pipeline Expansion, a vital project in the national interest,” Canadian Prime Minister Justin Trudeau said.
À Bloomberg, @MyStephanomics m’a questionné sur les mesures que nous prenons pour mener à bien la construction de l’oléoduc TMX. Voici pourquoi il est dans l’intérêt national d’aller de l’avant avec ce projet : pic.twitter.com/yqs2ikK74b
— Justin Trudeau (@JustinTrudeau) May 30, 2018
In April, Kinder Morgan announced it was suspending “all non-essential activities and related spending” on the project.
The company said under current circumstances, specifically the continued actions in opposition to the project by the British Columbian Government, the company would not commit additional shareholder resources to the expansion.
For more information visit the Trans Mountain website.
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