In The Media

Trans Mountain pipeline halt worries Canadian business

by John Benny & David Ljunggren (feat. Kelly Ogle)

Reuters News
April 9, 2018

MONTREAL/BENGALURU (Reuters) - The Canadian government on Monday said it was considering all its options on the Trans Mountain pipeline expansion, including a possible investment of public funds to ensure construction goes ahead, after Kinder Morgan Canada halted most work on the project and set a May 31 deadline to scrap the plan.

Canada’s Natural Resources Minister Jim Carr, when asked whether the federal government would invest in the C$7.4 billion ($5.8 billion) project, told the Canadian Broadcasting Corporation: “We are looking at all options — that’s on the table. We’re not ruling anything out. We are doing an assessment of what might be necessary, working with the government of Alberta.”

Carr’s comments follow Alberta Premier Rachel Notley’s pledge on Sunday that the oil-rich province was prepared to invest in the pipeline to ensure the project moves ahead.

Kinder Morgan Canada said on Sunday that it would scrap plans to nearly triple the capacity of its existing Trans Mountain pipeline, which extends from Alberta to British Columbia’s coast, unless various legal and jurisdictional challenges could be resolved by May 31.

The project was approved by the federal government in 2016, but that approval is being challenged in court by First Nation groups and local municipalities, and British Columbia is eyeing whether it has jurisdiction to block increased oil shipments through its territory.

To go ahead, the company needs more certainty, said Kinder Morgan’s Chief Executive Steve Kean in a conference call on Monday, which could mean “some kind of preemptive action” to make clear Canada’s jurisdiction over the project.

If the project is ultimately canceled, then the company would evaluate any write-off in the second quarter, he added.

Shares of Kinder Morgan Canada, spun off by its U.S. parent to raise funds for the project a year ago, fell as much as 19 percent to their lowest since its listing. The shares pared some losses but still ended down 12.58 percent at C$16.12.

The 1,147-kilometer (712 mile) pipeline is considered crucial to Canadian oil producers, who are desperate to access new overseas markets. Canada sends the majority of its energy products to the United States.

Prime Minister Justin Trudeau, when asked by reporters on Monday in Montreal, reiterated that the pipeline would be built.

For a story on the Canada’s options:

On Monday, Notley said she was still very hopeful a solution could be found, citing the risks of an imminent constitutional crisis.

CRUDE PRICES

Craig Wright, chief economist at Royal Bank of Canada, said that not increasing pipeline capacity had the potential to knock C$10 billion ($7.9 billion) off wealth generation in Canada annually by adding to a sustained discount for the country’s crude oil.

Canadian crude trades at a discount to the U.S. oil benchmark, with tight pipeline and rail capacity sending the Western Canadian Select differential sharply wider than normal earlier this year. It was trading at $16.25 on Monday, according to Shorcan Energy brokers.

The pipeline dispute spurred business lobby groups to ask the federal government to clear up the uncertainty.

“The Trans Mountain Expansion is in the national interest and if it fails to move forward, it will send a strong negative signal to investors at home and abroad that we, as a country, are not open for business,” said Perrin Beatty, President and CEO of the Canadian Chamber of Commerce.


Be the first to comment

Please check your e-mail for a link to activate your account.
SUBSCRIBE TO OUR NEWSLETTERS
 
UPCOMING EVENTS

CONFERENCE
Security, Commerce and FDI in Canada

October 1, 2019

Toronto, Ontario


SEARCH
THE CGAI PODCAST NETWORK

Managing Uncle Sam in 2019

July 16, 2019

(feat. Colin Robertson, John Manley, Meredith Lilly, and John Parisella)



Feminist Futures for the CAF

July 10, 2019

(feat. Stephen Saideman and Stefanie von Hlatky)



Discussing Op NEON and the Canadian Navy's Passage Through The Taiwan Strait

July 19, 2019

(feat. David Perry and Matthew Fisher)



EXPERTS IN THE MEDIA

Chinese foreign policy

Danielle Smith (feat. Stephen Nagy), Global News Radio, July 18, 2019

Trudeau pushes trade pact in EU summit as France moves ahead on CETA

by Mike Blnachfield (feat. Meredith Lilly), The Canadian Press, July 17, 2019

Opposition MPs skirt top soldier, place blame for DND ‘chaos’ on Trudeau, Sajjan

by Neil Moss (feat. David Perry), The Hill Times, July 17, 2019


LATEST TWEETS

HEAD OFFICE
Canadian Global Affairs Institute
Suite 1800, 421-7th Avenue SW
Calgary, Alberta, Canada T2P 4K9

 

OTTAWA OFFICE
Canadian Global Affairs Institute
8 York Street, 2nd Floor
Ottawa, Ontario, Canada K1N 5S6

 

Phone: (613) 288-2529
Email: contact@cgai.ca
Web: cgai.ca

 

Making sense of our complex world.
Déchiffrer la complexité de notre monde.

 

© 2002-2019 Canadian Global Affairs Institute
Charitable Registration No. 87982 7913 RR0001

 


Sign in with Facebook | Sign in with Twitter | Sign in with Email