Canadian government is in the process of purchasing Kinder Morgan Canada Ltd.’s Trans Mountain oil pipeline together with its notorious project to ensure it shields it from its opposing powers. The value of the firm will be reported during the approaching cabinet’s meeting that will be held in Ottawa. Prime Minister Justin Trudeaus is expected to give the full report on the acquisition.
The government intends to acquire the pipeline and develop it shortly before trading it. The highly regarded infrastructural project has been facing numerous legal uncertainties and opposing forces particularly from environmental groups and province of British Columbia but Trudeau has vowed to fight on and expand the pipeline that will reduce greenhouse gas emissions for the entire nation.
The Purchase is Short-Term
The Canadian federal Liberal government intends to spend about $4.5 billion to obtain the Trans Mountain pipeline and all its related assets and sell it at a later date once the market conditions will attract the best buyer willing to pay the best price for the project.
The federal government is not interested in keeping the project in the long run since it’s already in negotiation talks with potential investors including the pension funds, Alberta government, and indigenous communities in the region. Alberta government has already expressed its interest in acquiring the project and has agreed to foot the extra unexpected bills that may be incurred during the development of the project.
According to the Finance Minister Bill Morneau, the Export Development Canada will finance the acquisition of the company assets including the pipeline, pumping stations and rights of way for the route between Edmonton and Vancouver, Burnby marine terminal and much more.
The Project Will Increase Export Opportunities For Canada
The British Columbia has opposed the Kinder Morgan Canada project due to concerns about the increasing tanker traffic and oil spills that will negatively impact on the environment along the Pacific Coast. But the federal government through its Prime Minister has insisted that the pipeline should be built.
If the government succeeds in building the pipeline, the Trans Mountain expansion will triple the capacity of oil to 890,000 barrels. The project will operate on a 980 km stretch from Alberta to a terminal located in Vancouver. According to experts from oil industry, the expansion will create a link to the Asian markets thus becoming the Canadian’s major exports of oil products. The construction is likely to commence later in the year.