Ottawa Buying Trans Mountain Pipeline Assets for $4.5 billion

Ottawa Buying Trans Mountain Pipeline Assets for $4.5 billion

People in New Brunswick are gob-smacked that the federal government has bought a pipeline, after engineering the demise of Energy East. Don Darling, the Saint John mayor, said Ottawa claims Trans Mountain is in the national interest because it will create jobs.

"We appreciate that the federal government is taking a leadership role to get construction on this important national infrastructure project quickly restarted". Polls suggest that most Canadians support the construction of the pipeline, including more than half of the residents of B.C. The challenge for Ottawa - and Bay Street - is figuring out how much of the long-promised pipeline expansion must be built before the perceived risks begin to drop away and buyers step up with attractive offers. While in Alberta's case the goal is getting oil to tidewater, in Newfoundland and Labrador it's removing barriers to offshore oil and gas development. This banker said heavyweight USA investors such as Berkshire Hathaway Inc., which already has significant stakes in Canadian utilities, and Blackstone Group LP would be potential bidders.

Kinder Morgan Canada Ltd. stock stumbled again on Wednesday after two banks cut their target share prices in the wake of the company's deal to sell its biggest current and growth asset - the Trans Mountain pipeline system - to the federal government.

Notley held a jubilant news conference in front of the legislature in Edmonton after the federal government announced it is buying the 65-year-old oil pipeline from Alberta to the B.C. coast.

"Prime Minister Justin Trudeau is making a historic mistake in buying the doomed Kinder Morgan project", Adam Scott, senior adviser at Oil Change International (OCI), said in a statement denouncing Trudeau's decision, which comes just weeks after fierce opposition from Indigenous groups and environmentalists forced the oil giant to halt construction operations.

Finance Minister Bill Morneau has proposed sacrificing Canadian taxpayers to bail out an uneconomic USA pipeline owned by former Enron executives.

The prime minister has been cornered by his own over-zealous regulatory changes - enthusiasm that shut down the Northern Gateway and Energy East options.

No private company will be willing to go near Trans Mountain when the fate of the project remains in doubt.

Calgary-based pollster Janet Brown said the premier should be careful not to be seen celebrating prematurely on a file - and a provincial economy - that has been bedevilled by swings and setbacks. Kinder Morgan only paid $550 million for the Trans Mountain pipeline back in 2007.

"All they were really asking for was certainty that they could proceed with building the pipeline". The B.C. government disputes that position, arguing the pipeline expansion poses an environmental threat. Even the Conservatives criticized the government for leaving taxpayers on the hook for the project.

Asked about the ongoing opposition, Minister of Indigenous Services Jane Philpott said that Ottawa will ensure it is "fully respectful" of the rights of Indigenous Peoples.

Did the government of Canada show strong business acumen in maximizing its leverage to get the best deal for its citizens in this situation? Vancouver Quadra MP Joyce Murray said Trans Mountain takeover is not a "popular decision" among her constituents.



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