Kinder Morgan says investment in oil pipeline expansion may be untenable

Replacement pipe is stored near crude oil storage tanks at Kinder Morgan’s Trans Mountain Pipeline terminal in Kamloops, British Columbia, Canada, November 15, 2016. REUTERS/File Photo

(Reuters) – Kinder Morgan Inc (KMI.N) said on Wednesday that recent events confirm an investment in the Trans Mountain pipeline expansion may be “untenable” and said Ottawa’s pledge of financial support does not resolve political risk related to British Columbia’s opposition.

The comments come as the British Columbia (B.C.) government pledged to file a legal challenge by month-end to determine whether it has the jurisdiction to stop the C$7.4 billion ($5.9 billion) project, which was approved by the federal government in 2016 and would nearly triple capacity on the pipeline from Alberta to a Vancouver-area port.

Kinder Morgan Canada (KML.TO), a unit of Kinder Morgan, halted most spending on the expansion earlier this month and set a May 31 deadline to decide if it would scrap the project entirely, citing legal and jurisdictional issues.

“As we said then, it’s become clear this particular investment may be untenable for a private party to undertake. The events of the last 10 days have confirmed those views,” Chief Executive Steven Kean said on a conference call.

While Canadian Prime Minister Justin Trudeau has said Canada is prepared to offer financial aid to ensure the project goes ahead, Kean dodged a question about whether that support would ensure construction.

“They’re really two separate things,” he said. “Most of the investment is in British Columbia, where the government is in opposition to the project … That is an issue that, in our view, needs to be resolved.”

The Trans Mountain expansion is considered crucial for Alberta’s oil industry which has been beset by transportation bottlenecks. It is fiercely opposed by some B.C. cities, some aboriginal groups, and environmentalists concerned about possible oil spills.


The company said while it is not in a position to move on takeovers until the uncertainty around Trans Mountain is resolved, it sees good opportunities in the western Canadian midstream space.

“There are some very capable players with good midstream assets,” Kean said, adding: “Intent is, and was, that KML would be the vehicle to invest in those opportunities.”

The company has a strong balance sheet and is well positioned for takeovers, especially if cash earmarked for capital projects is freed up, said M. Paul Bloom, investment manager with Bloom Investment Counsel.

“I think you can expect if the Trans Mountain pipeline does not go ahead (Kinder Morgan) will be bidders for various assets here in Canada, and probably fairly quickly as well,” he said.

Kinder Morgan Canada, which was spun off from parent Kinder Morgan in May last year, reported a net income of C$44.4 million ($35.17 million) for the first quarter ended March 31, down from C$46.8 million for the same period last year.

Texas-based Kinder Morgan separately reported net income available to common stockholders of $485 million, or 22 cents per share, in the quarter to the end of March, compared with $401 million, or 18 cents per share, a year earlier.



Members of Secwepemc Nation to Build ‘Tiny Houses’ on Trans Mountain Pipeline Route

Tiny Houses Arrive for Standing Rock. Photo by Roger Peet

A First Nations group plans to build “Tiny Houses” on route of the proposed Trans Mountain pipeline expansion.

The group is called the Tiny House Warriors.

According to a media release by Greenpeace, members of the Secwepemc Nation are constructing the first of ten tiny houses — based on a design from allies at Standing Rock— next week at an undisclosed location on unceded Secwepemc territory. Greenpeace Canada, is a partner in the build.

InfoTel News reports, from Sept. 5 to Sept. 8 at Neskonlith near Kamloops, volunteers with the Tiny House Warriors will be working to build a home in the path of the pipeline with the intention of rebuilding village sites along the route. In doing this the group hopes to assert its authority over unceded territory.

The unceded Secwepemc territory, is the largest indigenous territory that Kinder Morgan’s controversial Trans Mountain pipeline expansion will cross.

The Kinder Morgan Trans Mountain pipeline was originally built in 1953 and the $6.8 billion expansion is expected to triple the lines capacity as it runs from Edmonton to Vancouver.

For more on the tiny home protest go here.

Tiny Houses in Standing Rock. Photos by Roger Peet.

RCMP And ERT Arrest 7 Activists On Kinder Morgan Drilling Barge (VIDEO)


Update: Several activists arrested on Kinder Morgan barge

Police arrested seven activists aboard a Kinder Morgan drilling barge near the Westridge Marine Terminal in Burnaby Monday morning.

According to anti-pipeline activist Adam Gold, two protesters boarded the barge Sunday and stayed overnight. More protesters arrived to join them and bring supplies Monday morning. That’s when police showed up and removed the group.

Video: Burnaby Mountain Updates

According to the Burnaby RCMP, seven protesters were arrested with help from the Lower Mainland Emergency Response Team.

“Early this morning, the Burnaby RCMP was asked to remove the protestors as it was not safe for them to remain onboard and they were impeding the work being performed on the barge,” the police stated in a release. “The Burnaby RCMP would like to remind the public that the drilling barge is private property and as such those persons arrested will be facing criminal mischief charges.”

On Sunday, activists issued a news release saying they had seized the Kinder Morgan drilling barge on the Burrard Inlet, around noon.

In the release on Facebook, it said, “Kinder Morgan has not undertaken the necessary consultation with Hereditary Chiefs, and they are infringing upon the sovereignty of indigenous people of the unceded lands and waters here in Coast Salish Territory.”

It also announced that two activists had taken direct action, stating “This action is in solidarity with all indigenous nations displaced by the Tar Sands, along the current and proposed Kinder Morgan pipeline routes, and in solidarity with the Secwepemc Nation and Secwepemc Woman Warrior Society.”

Kinder Morgan is drilling boreholes around the Westridge Marine Terminal – similar to the survey work that spurred mass protests on Burnaby Mountain last fall. The work will continue until Feb 29.

Kinder Morgan’s $6.8-billion plan to expand the Trans Mountain pipeline includes expanding the Westridge Marine Terminal, where tankers fill up with crude.

The Westridge dock is slated for expansion if Kinder Morgan gets approval to twin the Trans Mountain pipeline. The company is drilling around the dock to collect soil samples, which is upsetting some pipeline opponents. Photograph By Jennifer Moreau

The Westridge dock is slated for expansion if Kinder Morgan gets approval to twin the Trans Mountain pipeline. The company is drilling around the dock to collect soil samples, which is upsetting some pipeline opponents. Photograph By Jennifer Moreau. Burnaby Now

The Westridge Marine Terminal falls within the traditional territory of the Tsleil-Waututh Nation, which is opposed to the pipeline expansion.

By Red Power Media, Staff, Updated Jan 19, 2016