CALGARY, A.B. – Kinder Morgan Canada Limited has announced that it is suspending all non-essential activities and related spending on the Trans Mountain Expansion Project.
KML also announced that under current circumstances, specifically including the continued actions in opposition to the Project by the Province of British Columbia, it will not commit additional shareholder resources to the Project.
However, KML will consult with various stakeholders in an effort to reach agreements by May 31st that may allow the Project to proceed. The focus in those consultations will be on two principles: clarity on the path forward, particularly with respect to the ability to construct through BC; and, adequate protection of KML shareholders.
“As KML has repeatedly stated, we will be judicious in our use of shareholder funds. In keeping with that commitment, we have determined that in the current environment, we will not put KML shareholders at risk on the remaining project spend,” said KML Chairman and Chief Executive Officer Steve Kean. The Project has the support of the Federal Government and the Provinces of Alberta and Saskatchewan but faces continued active opposition from the government of British Columbia.
“A company cannot resolve differences between governments. While we have succeeded in all legal challenges to date, a company cannot litigate its way to an in-service pipeline amidst jurisdictional differences between governments,” added Kean.
“Today, KML is a very good midstream energy company, with limited debt. The uncertainty as to whether we will be able to finish what we start leads us to the conclusion that we should protect the value that KML has, rather than risking billions of dollars on an outcome that is outside of our control,” Kean said. “To date, we have spent considerable resources bringing the Project to this point and recognize the vital economic importance of the Project to Canada. Therefore, in the coming weeks we will work with stakeholders on potential ways to continue advancing the Project consistent with the two principles previously stated.”
Trans Mountain has spent C$1.1 billion (approximately half of which has been spent since the KML IPO) and made unprecedented efforts to develop the Project since its initial filing with the National Energy Board in 2013.
If we have to, Alberta is prepared to do whatever it takes to get this pipeline built – including taking a public position in the pipeline.
Put another way, Alberta is prepared to be an investor in the pipeline.
This pipeline will be built.#ableg #abpoli #KeepCanadaWorking
— Rachel Notley (@RachelNotley) April 8, 2018
The federal government put pressure on Horgan to back away from his opposition to the project, with Natural Resources Minister Jim Carr describing it as “crucial” to expanding Canada’s export markets for its natural resources while creating thousands of jobs.
“The government of Canada calls on Premier Horgan and the B.C. government to end all threats of delay to the Trans Mountain expansion,” Carr said in a news release. “His government’s actions stand to harm the entire Canadian economy.”
Carr said under Canadian law, Ottawa has the jurisdiction to approve the project.
“We are determined to find a solution,” he added. “With all our partners, we continue to consider all available options. As our prime minister has said, this pipeline will be built.”