Slowly, but surely, Russia is…
The EU is weighing a…
Kinder Morgan does not seem very upbeat about the prospects of its US$5.9-billion Trans Mountain pipeline project despite a pledge by the Alberta and federal Canadian government to support the pipeline expansion financially.
In its Q1 2018 report conference call yesterday, CEO Steven Kean said that “it’s become clear this particular investment may be untenable for a private party to undertake. The events of the last 10 days have confirmed those views.”
Indeed, the last couple of weeks have been very eventful, with Alberta’s government threatening British Columbia with legislation that could see exports of Albertan crude and fuels to the neighboring province reduced, and B.C. threatening to go to court if this legislation is approved.
Prime Minister Trudeau meanwhile has offered financial support to Kinder Morgan to make sure the project goes ahead. For now, the PM seems wary of doing anything else in a bid to avoid alienating B.C. voters ahead of next year’s federal elections. However, it is becoming increasingly clear that Ottawa cannot have its cake and eat it, too. If it really wants Trans Mountain expanded it will have to risk alienating B.C.’s environmentalists. If the risk is too high, then it would eventually have to go back on its own decision from 2016 to approve the pipeline project.
He federal government is now looking for legal ways to assert its jurisdiction over the pipeline that will allow it to trump whatever argument against it B.C. can come up with.
Related: Canada’s Oil Patch To Turn Profitable In 2018
Kinder Morgan is not making things easier for Ottawa, either. For the company, the problem is not really financial. Even with all the financial help the federal government can provide, the pipeline maker is uncertain it will go through with the project. The problem: B.C. political opposition.
Asked about whether funding from the government would ensure the Trans Mountain expansion, Kean said “They’re really two separate things. Most of the investment is in British Columbia, where the government is in opposition to the project ... That is an issue that, in our view, needs to be resolved.”
Alberta, by the way, is ready to buy the project and take it off Kinder Morgan’s hands. This option may have sounded far-fetched a week ago but now it is beginning to look increasingly like a legitimate solution to the problem the pipeline maker is facing.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.