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Kinder Morgan Pipeline Faces Opposition From BC Political Parties

Pipeline

Following an initial public offering that raised US$1.3 billion (C$1.75 billion), Kinder Morgan Canada’s restricted voting shares start trading on the Toronto Stock Exchange on Tuesday, just hours after two British Columbia parties opposing a Kinder Morgan pipeline expansion agreed to form an alliance that may end a 16-year-long rule of the more energy-friendly Liberals in the Canadian province.

Kinder Morgan and Kinder Morgan Canada announced on Tuesday the completion of the IPO of 102,942,000 restricted voting shares of Kinder Morgan Canada at a price to the public of US$12.61 (C$17.00) per share, but began trading at C$15.79 early in the trading day—below the set price.

“Closing of the Offering removed the final condition to Kinder Morgan’s investment approval for the Trans Mountain Expansion Project,” the company said in today’s statement.

The Trans Mountain pipeline currently transports around 300,000 bpd of crude oil and refined petroleum products from the oil sands in Alberta to Vancouver, British Columbia and Washington state. In November 2016, Canada approved the US$5.5 billion (C$7.4 billion) Trans Mountain Expansion Project, to increase the nominal capacity of the system to 890,000 bpd. Under the project timeline, construction is expected to start in September this year, and the pipeline is seen entering into service at the end of 2019.

The day before Kinder Morgan Canada starts trading in Toronto, the BC Green Party said on Monday it would support the New Democratic Party (NDP) in British Columbia’s legislature, following the recent provincial election. The support from the Greens gives the NDP the backing of a total of 44 members of the legislative assembly (MLAs) — NDP’s 41 members and the three Green MLAs — the minimum number for a majority of support in the 87-seat legislature. The Liberals hold 43 seats.

Although there are issues on which the Greens and the NDP disagree, one of the things that they agreed on during the campaign was the opposition to Kinder Morgan’s pipeline project.

Related: Is This The "Mystery" Massive Long Supporting The Oil Market?

However, Canada’s Prime Minister Justin Trudeau said on Tuesday that Canada stands by its decision to approve the Trans Mountain pipeline expansion and “regardless of a change in government, in British Columbia or anywhere, the facts and evidence do not change”.

“The decision we took on the Trans Mountain pipeline was based on facts [and] evidence, on what is in the best interest of Canadians,” Trudeau said.

Commenting on the British Columbia election and the Greens-NDP alliance, Alberta Premier Rachel Notley said in a statement today:

“It is no secret that we have one important disagreement. As I have said from the beginning, the twinning of the Trans Mountain Pipeline is critical not only to Alberta’s economy, but to the national economy.”

It’s important to note that provinces do not have the right to unilaterally stop projects such as Trans Mountain that have earned the federal government’s approval,” Premier Notley said.

By Tsvetana Paraskova for Oilprice.com

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