Published: Tue, May 29, 2018
Sci-tech | By Brandy Patterson

Federal government spending $4.5B to buy Trans Mountain pipeline

Federal government spending $4.5B to buy Trans Mountain pipeline

"The station was quickly isolated and as a precaution, the main Trans Mountain Pipeline has been shut down", the company said, adding it expected to restart the pipeline Sunday afternoon.

Alberta's premier calls the decision by the federal government to purchase the Trans Mountain Pipeline Expansion for $4.5 billion "a major step forward for all Canadians".

The deal includes related pipeline terminal assets.

It plans to seek a buyer.

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

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Kinder Morgan last month gave Ottawa an ultimatum: Chairman Steve Kean said the company would suspend all work on the expansion project entirely if the legal issues surrounding it can not be resolved by May 31, adding that it would not continue risking shareholder funds on the project unless the clouds over it clear.

The plan - similar to how Canada financed and managed shares in General Motors and Chrysler in 2009 during the financial crisis - will include a new Crown corporation to manage the project. It makes more sense to let the government take on all the completion risk, he said.

Morneau said Indigenous groups, pension funds, and others have expressed interest in the project.

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 Alberta government has agreed to cover any unexpected costs that arise during construction.

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May said Indigenous rights were not being respected in regards to the permits issued to twin the existing pipeline.

Financing will come from Export Development Canada.

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

Analysts have said China is eager to get access to Canada's oil, but largely gave up hope that a pipeline to the Pacific coast would be built. A lack of capacity in pipelines or in rail cars to ship oil produced in Alberta is also hurting Canada's energy sector.

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