Kinder Morgan Canada shares sink on Trans Mountain halt

While Kinder Morgan has made a decision to halt work on expansion of its Trans Mountain pipeline due to opposition from the B.C. NDP government, Prime Minister Justin Trudeau has vowed the pipeline will become a reality. “My views on this have been consistent for the past year”, Horgan said.

As it talks about protecting the province’s environment as the key reason for opposing the Trans Mountain pipeline, it doesn’t seem to see the hypocrisy of supporting the mining of its own natural gas reserves and building a new pipeline – yes, a pipeline – to a new tanker terminus on the coast.

Alberta is “prepared to do whatever it takes” to get the project finished, including becoming an investor in Trans Mountain, Premier Rachel Notley said at a press conference in the province’s legislature in Edmonton on Sunday. Her party is also working to give her the powers to choke the flow of oil to B.C., which could send prices soaring at our pumps. “Trans Mountain was approved by the federal government following more than two years of exhaustive review and the attachment of almost 200 environmental and legal conditions”.

Environmental groups hailed the announcement.

“A company can not resolve differences between governments”, said KML Chairman and Chief Executive Officer Steve Kean.

The Houston-based CEO, a lawyer by training, spent recent months deftly building a case for keeping the faith of Kinder Morgan investors, while potentially walking away from the company’s controversial link between Alberta’s oil sands and Asian markets.

Kinder Morgan, which has operated a pipeline in this country without incident since 1953, has received all the requisite approvals to proceed.

It later edged back from a pledge to block increased shipments of crude oil through the province, which had sparked a trade war with Alberta.

The company went on to say that those actions have created even greater, and growing, uncertainty with respect to the regulatory landscape facing the project. “It’s time for him to accept his accountability, get on the plane to Ottawa and solve this little mess that he’s created for all British Columbians”. “I don’t know, really, if that’s too far off”.

In spite of assurances last week from Prime Minister Justin Trudeau, who said the pipeline “will get built”, the company said the decision was prompted by continued opposition by the British Columbia government and lack of clarity about the way ahead for the $7.4 billion project, which the company said has already cost $1.1 billion.

“It was not a crisis when Energy East went down”. Because price target projections are essentially the opinions of covering analysts, they have the ability to vary widely from one analyst to another. The federal government urged British Columbia on Sunday to stop delaying the pipeline project.

The federal government has previously stepped in to assist aerospace workers in Quebec and protect auto industry jobs in Ontario, Notley said.

The Trans Mountain expansion to add 590,000 bpd to its current 300,000 bpd capacity is needed to show Canada is a good place to do business, said a spokeswoman for Calgary-based Canadian Natural Resources Ltd., which has a contract to ship 75,000 barrels per day on the new pipeline. The pipeline carries oil and petroleum products from Alberta to the coast, and supporters argue expanding it is necessary to get Canadian oil to global markets.

But perhaps Alberta’s proposal to take a stake in the project would help mitigate the risk for investors, particularly if Ottawa joined in. In today’s emergency debate, United Conservative Leader Jason Kenney urged Notley to pressure the Trudeau government to make a declaration under Section 92 (10) (C) of the Canadian Constitution – which would essentially nullify any provincial authority B.C. might try to exercise. That capital spending is expected to boost Kinder Morgan’s all-important earnings before interest, taxes, depreciation and amortization or EBITDA by US$1.6-billion annually, and inject a little pop into a stock price that lost its fizz, sliding from US$40 to US$15 over the past three years.

Oh, sure, Premier Notley is doing her finest impersonation of a pro-pipeline politician.