Canada to buy major pipeline to ensure it gets built

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

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

Kinder Morgan Canada Ltd.'s shares traded higher after the federal government announced it would buy its controversial Trans Mountain pipeline for $4.5 billion.

In a statement, Kinder Morgan said it was alerted to an operational disruption through its internal safety system in the early hours of Sunday morning.

The options were presented during an early-morning cabinet meeting before ministers made a call on how to proceed.

"We have agreed to a fair price for our shareholders and have found a way forward for this national interest project", said Steve Kean, chief executive officer of Kinder Morgan Canada and its parent, Kinder Morgan Inc (KMI.N).

Morneau says it is not the Government of Canada's intent to be a long-term owner of the pipeline and it will work with investors to transfer the project and related assets to a new owner to ensure the project operates in the public's interest.

The Trans Mountain Expansion Project involves building a new pipeline along the existing Trans Mountain Pipeline running from Edmonton, Alberta to Burnaby, British Columbia, and expanding the capacity of the terminal in Burnaby.

Green party Leader Elizabeth May has pleaded guilty to a criminal contempt of court charge for violating an injunction at a Kinder Morgan work site in Burnaby, B.C.

"It is not the intention of the government of Canada to be a long term owner of this project", Mr. Morneau said. The company said it would decide on the pipeline project's fate on 31 May.

The Alberta government will provide funding for any unexpected costs that arise during construction.

Ottawa is pressing ahead, firmly of the opinion there is no doubt about its jurisdiction. It is also confident it will prevail in a Federal Court of Appeal challenge by some Indigenous communities over its approval of the pipeline, a ruling on which is due any day.

Buying the pipeline outright had become increasingly likely after Prime Minister Justin Trudeau first pledged only to backstop it.

Financing will come from Export Development Canada.

Canada's oil sector has been stung in the past year as foreign energy companies retreated amid concerns about the environmental toll, high production costs and a risky regulatory regime.

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