The Government of Canada has agreed to buy the Trans Mountain Pipeline system and the expansion project for C$4.5 billion from Kinder Morgan Canada.
As part of the agreement, the government has agreed to fund the resumption of the expansion project (TMEP) and construction work by guaranteeing TMEP’s expenditures under a separate federal government recourse credit facility until the transaction closes. It is expected to close in either the third or fourth quarter of 2018.
Additionally, the government will work with the board to seek a third-party buyer for the system and expansion project.
Kinder Morgan will continue to manage a portfolio of strategic infrastructure across Western Canada, including:
– An integrated network of crude storage and rail terminals in Alberta. The storage terminal is the largest merchant storage terminal facility in the Edmonton market and the largest origination crude by rail loading facility in North America
– The Vancouver Wharves Terminal
– The Cochin Pipeline system
Steve Kean, chairman and CEO, says: ‘The outcome we have reached represents the best opportunity to complete TMEP and thereby realise the great national economic benefits promised by that project.
‘In addition to the benefit of the sale proceeds, our remaining portfolio of assets represents a strong platform for the company and shareholders now and in the future. We continue to invest in expansions of our Canadian assets and look forward to future growth in the service of our customers and shareholders.’