Trans Mountain Pipeline, Expansion Project to Be Sold for C$4.5 Billion
HOUSTON – Kinder Morgan said that Kinder Morgan Canada Limited agreed to the purchase of the Trans Mountain Pipeline system and the expansion project (TMEP) by the Canada government for C$4.5 billion (US$3.46 billion).
As part of the agreement, the government will fund the resumption of TMEP planning and construction work by guaranteeing TMEP’s advances under a separate federal recourse credit facility until the transaction closes.
“The outcome reached represents the best opportunity to complete TMEP and thereby realize the great economic benefits promised by that project,” said KMI CEO and KML Chairman and CEO Steve Kean.
Earlier, Kinder Morgan halted essential spending on the project and said it would cancel it altogether if the national and provincial governments could not guarantee it.
According to AP, Finance Minister Bill Morneau said last week the pipeline must and will be built. The line would allow Canada to diversify and increase exports to Asia, where it could command a higher price. But there is stiff environmental opposition.
Canada has the world’s third-largest oil reserves but 99% of its exports go to refiners in the U.S., where Canadian oil sells at a discount.
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