Federal Purchase of Trans Mountain Project: Advance As Expected

Finance

The federal government is still planning to complete the $ 4.5 billion acquisition of the Trans Mountain Pipeline Expansion Project and related assets by the end of August and continue to look for potential buyers.

On Sunday, as planned, the current owner of the pipeline, the Canadian subsidiary of American Kinder Morgan, withdrew from the process of finding new buyers, leaving it to the sole government to do so.

“The federal government is not interested in being the owner and operator of a pipeline, it is thought to be a commercial project [to be operated by the private sector],” said a government source on Sunday, adding that the government intends to dispose of the project once it owns it.

Potential buyers have come forward in the last few months since the end of May when the federal government announced it was intervening to save the project threatened by opposition from the Government of British Columbia and the climate of political uncertainty as well. created.

“We are in no hurry to sell because we have to do this in the best interest of all Canadians, including getting a good price,” said the source who wished to keep anonymity. Removing the uncertainty surrounding the file is also part of the government’s agenda. In addition, Ottawa has already promised to provide compensation “to protect any potential new homeowners from the costs associated with delays caused by political acts”.

The government could assign the project to one or more buyers, or a group of buyers such as a consortium of an Aboriginal investor and an institutional investor, but nothing is yet arrested, the source said.

At the end of May, Ottawa had a number of objectives in mind: to maintain the company’s operations and to find new markets internationally, and to ensure that the pipeline expansion project could continue. . These objectives were fulfilled in particular with a guarantee of loan from the government to the company until it acquires the project.

The next steps in the file, before the conclusion of the transaction – at the end of August according to the government’s estimate, or towards the end of the third quarter or the beginning of the fourth according to the company -, include the obtaining of authorizations. and the shareholders.

APTN

 

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