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In Canada Govt steps in to buy controversial pipeline

Canada's government said Tuesday it will take over a controversial pipeline expansion project to ensure it gets built over the fierce opposition of environmental activists and a regional government.

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A demonstrator carrying a Canadian flag protests against the expansion of Texas-based Kinder Morgan's Trans Mountain pipeline project in Burnaby, British Columbia, Canada on March 10, 2018 play

A demonstrator carrying a Canadian flag protests against the expansion of Texas-based Kinder Morgan's Trans Mountain pipeline project in Burnaby, British Columbia, Canada on March 10, 2018

(AFP/File)
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Canada's government said Tuesday it will take over a controversial pipeline expansion project to ensure it gets built over the fierce opposition of environmental activists and a regional government.

Ottawa will pay Kinder Morgan Can$4.5 billion ($3.5 billion) for the Trans Mountain pipeline, which is to move 890,000 barrels of oil a day from landlocked Alberta to the Pacific coast for export overseas, Finance Minister Bill Morneau told a news conference.

"The federal government has reached an agreement with Kinder Morgan to purchase the Trans Mountain pipeline and the infrastructure related to the project," he said.

Kinder Morgan investors must still vote on the sale, which is scheduled to close in August, but the deal will allow construction to resume immediately, the minister said.

Ottawa approved the project in 2016, saying it was in the "national interest."

Currently 99 percent of Canada's oil is sold to the United States at a discount, and access to the Pacific coast is seen as key to diversifying the world's sixth largest oil producer's energy exports.

But British Columbia's social democratic government recently joined environmental activists' fight against the pipeline, prompting a trade row with neighbor Alberta and leading Kinder Morgan to temporarily halt its construction until the dispute was resolved.

Amid the feuding, the pipeline has become a barometer for foreign investments in Canada, with some warning of a spillover into other sectors of the economy.

Morneau said the government's purchase of the project "will ensure that we're able to safely get Canadian oil resources to world markets where we can get a fair price for them."

"And, it will reassure investors that Canada is a country that respects the rule of law and gets big, important things done," he added.

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