Canada's Government Buys Controversial Oil Pipeline, To Ensure It Gets Expanded

Live: Feds to spend $4.5 billion to buy Trans Mountain pipeline, B.C. terminal

"The parties have also agreed to work together to find a buyer for the pipeline and the project between now and July 22", said Kinder Morgan CEO Steve Kean in a conference call Tuesday.

Finance Minister Bill Morneau unveiled the government's long-awaited, big-budget strategy on Tuesday to save the plan to expand the oilsands pipeline.

Many indigenous people see the new pipeline as a threat to their lands, echoing concerns raised by Native Americans about the Keystone XL project in the US.

In addition to the initial costs of paying to nationalize a massive energy enterprise, Canada's CBC reports that the government could be obliged to spend billions more to finish the expansion.

The price tag for the Trans Mountain expansion has been pegged at $7.4 billion but Carr would not say whether that figure was accurate or if there has been cost overruns.

Export Development Canada will finance the purchase, which includes the pipeline, pumping stations and rights of way along the route between Edmonton and Vancouver, as well as the marine terminal in Burnaby, B.C., where oil is loaded onto tankers for export.

The federal government's acquisition of the project "has not changed the course of the government of British Columbia" and the province has "no intention" of withdrawing its legal reference case, Premier John Horgan told reporters Tuesday in Victoria. Morneau said cabinet approved the move, which now is before the company's shareholders.

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"This allows us to get rid of the political risk around [the pipeline] because we [are imposing] federal jurisdiction over the project", he said.

With files from the Canadian Press. The crown will use the expertise and management of the employees acquired from Kinder Morgan to get the pipeline built.

Horgan spoke with Prime Minister Justin Trudeau prior to Morneau's announcement. "Why would we agree to a project that went through the worst environmental review in the history of time, which Bill Morneau referred to as the 'most rigorous process in our history, ' " said May.

Steel pipe to be used in the oil pipeline construction of Kinder Morgan Canada's Trans Mountain Expansion Project sit on rail cars at a stockpile site in Kamloops, British Columbia, Canada May 29, 2018.

Canada is buying a pipeline expansion project rather than risk it being derailed by protests and delays.

Facing stiff environmental opposition from British Columbia's provincial government and activists, Houston-based Kinder Morgan earlier halted essential spending on the project and said it would cancel it altogether if the national and provincial governments could not guarantee it.

As Royal Dutch Shell nears a final investment decision on a proposed C$40 billion liquefied natural gas project in northern British Columbia, hopes this may signal an easier path ahead for major energy projects in Canada may be misplaced. "They are getting a very good value", said Paul Bloom at Bloom Investment Counsel Inc, which owns about 300,000 shares in Kinder Morgan Canada. If Alberta simply upgraded what it sent through the Trans Mountain pipeline into oil, the existing pipeline's capacity, as well as that of all other pipelines that service the oil sands, could be boosted by a third.

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