Kinder Morgan considering investing elsewhere as Trans Mountain looks ’untenable’
CALGARY – There are other pipeline projects where Kinder Morgan Inc. can invest its shareholders money, the company’s top executives said Monday, as it announced it would stop spending money on the Trans Mountain pipeline expansion between Alberta and B.C.
“We expect to continue investing but it has become clear that this particular investment (the Trans Mountain pipeline expansion) may become untenable for a private party to undertake,” said Kinder Morgan Inc. president and CEO Steve Kean.
Shares in Kinder Morgan on the TSX fell more than 13 per cent this morning.
Kean said $1.1 billion had been spent on the $7.4 billion project to expand the delivery of crude oil from Alberta to the B.C. coast so far. The company had previously said it was spending $30 million per month on the project, but it will now delay all non-essential spending.
Kean re-iterated his company’s May 31 deadline, asking the Canadian federal government to intervene in the inter-provincial dispute between Alberta, Saskatchewan and B.C., which has consistently opposed the project and has attempted to frustrate its progress.
“We can’t move the seasons in Canada. There are certain seasons where you can do certain things. We’re on top of all that right now so we don’t have the ability to just kick the can down the road,” Kean said of the timing for the announcement.
He also said he didn’t want to risk more shareholder dollars until Canada could provide more certainty that it would be built.
“We’re going into a very high spend. We don’t want to kick the can down the road until we have another $2 billion in the project,” Kean said.
In an attempt to bolster the project’s prospects – and also as a threat to B.C. – Alberta Premier Rachel Notley announced late Sunday that her government would be willing to directly invest in the pipeline to see that it gets built.
“Premier Horgan believes he can harass the investors and managers of Kinder Morgan, that they will give up, and that this will kill this project. He is wrong here as well,” Notley said in a release, adding the province would do “whatever it takes to get this pipeline built” including a direct investment.
“If we take that step, we will be a significantly more determined investor.”
Kean said he was encouraged by the Alberta government’s position and was open to discussions of direct investment in the project to backstop the risk that shareholders have taken on the project so far.
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