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Canada to buy major pipeline to ensure it gets built

29 May 2018

The Government of Canada has reached an agreement with Kinder Morgan to buy the Trans Mountain Expansion Project and related pipeline and terminal assets for US$3.5 billion (C$4.5 billion), as the federal government stepped in to save the project after British Columbia's fierce opposition to the project was threatening to derail it.

Morneau presented the options during an early-morning cabinet meeting today before ministers made a decision to approve the project. He described the $4.5 billion buy-out as a "fair price for Canadians", and said the commercial agreement is a "sound investment opportunity".

Morneau said in return, the company will move forward with its plan to twin the pipeline this summer, while the sale is finalized, which is expected to happen in August.

"At the appropriate time, Canada will work with investors to transfer the project and related assets to a new owner or owners, in a way that ensures the project's construction and operation will proceed in a manner that protects the public interest", reads a release.

Last month, about 200 protesters opposing the expansion were arrested for breaking a court injunction barring them from entering within five metres (16ft) of two Kinder Morgan terminals in Burnaby, BC.

"The Trudeau government's reckless choice to compel Trans Mountain endangers the lives and welfare of its citizens", said Ruth Breech at Rainforest Action Network.

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Numerous indigenous groups also oppose the project, though a number of First Nations have signed on to the expansion project.

The Alberta government is also supporting the project and will provide an "emergency fund" to cover unforeseen costs "if needed".

Ottawa has the constitutional authority to build interprovincial projects like pipelines, but B.C. Premier John Horgan has gone to court to get a judge to weigh in on whether B.C.'s jurisdiction for the environment would allow him to regulate what flows through the pipeline. The company said it would decide on the pipeline project's fate on 31 May.

He described the purchase as an "enormous" intervention on the part of the federal government to get the project done.

This development comes after the Liberals offered to indemnify Kinder Morgan against financial losses stemming from efforts by the B.C. government to thwart the expansion.

The pipeline expansion would triple the capacity of an existing line to ship oil extracted from the oil sands in Alberta across the snow-capped peaks of the Canadian Rockies.

Canada to buy major pipeline to ensure it gets built