The federal government is set to become the official owner of the Trans Mountain pipeline expansion after failing to quickly flip the project to another private-sector buyer.
Pipeline owner Kinder Morgan had been working with the government to identify another buyer before July 22.
But with that date set to pass without a deal, it was expected the pipeline company will now take Ottawa's $4.5-billion offer to purchase the project to its shareholders.
Pending their approval, the sale, which includes the existing pipeline, the pumping stations and rights of way, and the Westridge marine terminal in Burnaby, B.C., will be approved sometime in August or September.
The $4.5-billion purchase price does not cover the construction costs of building the new pipeline, which previous estimates have pegged at around $7.4 billion.
Finding another buyer for the project before Sunday's deadline was widely considered a long shot because of the project's risks.
But the government insists it does not plan to own and operate the pipeline over the long term and is expected to continue talking to interested parties.
The government had previously indicated that there were numerous groups interested in purchasing the controversial project, including pension funds and Indigenous groups.
Finance Minister Bill Morneau's spokesman, Daniel Lauzon, said Ottawa still intends to sell the pipeline, if and when a suitable partner is identified and it's in the best interests of Canadians.
"We have no interest in being a long-term owner of a pipeline, but we will be the temporary caretaker," Lauzon told The Canadian Press on Sunday. "We won't rush that."
News of the failure to find another partner by July 22 came one day after protesters opposed to the Trans Mountain expansion took to Parliament Hill in hazardous-materials suits and carrying a fake pipeline.
It was the latest in a string of such rallies by environmental and Indigenous groups, which also included the erection of a similar cardboard pipeline outside the Canadian High Commission in London in April.
Lauzon on Sunday defended the decision to purchase the pipeline, saying the project, whose aim is to get Canadian oil to Asian markets, remains in the national interest.
The Trans Mountain expansion will build a new pipeline roughly parallel to the existing, 1,150-km line that carries refined and unrefined oil products from the Edmonton area to Burnaby, B.C.
It will nearly triple the line's capacity to 890,000 barrels a day. Trans Mountain is the only pipeline carrying Alberta crude to the West Coast and the hope is that most of the oil will end up in tankers bound for Asia.
Ottawa approved the expansion project in November 2016 and British Columbia's then-Liberal government followed suit two months later.
But four months after that, the provincial Liberals were replaced by the NDP under John Horgan, who has a coalition of sorts with the Green party that includes an agreement to oppose the expansion in every way possible.
The federal government has said its hand was forced by Horgan, who has gone to court for judicial approval to regulate what can flow through the pipeline — a measure of opposition that made Kinder Morgan Canada, the project's original owner, too nervous to continue.
The company halted all non-essential spending on the pipeline expansion in April pending reassurances from Ottawa that the project would come to fruition.
The federal government had said Canada would cover any cost overruns caused by B.C.'s actions, but in the end that wasn't enough.
Following the government's announcement that it planned to purchase the pipeline, Kinder Morgan agreed to start construction this summer as planned.
Comments
No surprise here. Hopefully October 2019 will bring renewal.
Couldn't find anyone stupid enough to buy an overpriced old pipeline? What a surprise?
Is Canada buying the Brooklyn Bridge or a 50 year old pipeline? We seem to be conned by the former Enron boys. If M. Trudeau agreed to pay pay $3.85 billion why are we paying $4.5b and is that US or Cdn Funds ? What do we taxpayers get for our money? Supposedly we get the old pipeline and the Engineering design and drawings for the new line ? Who came up with the $7.4b estimate to build the Line # 2, new, expansion pipeline.? Apparently KM has agreed to build the line. Is $ 7.4 a fixed price, US or Cdn? If it is not a fixed price then we Owners must solicit competitive pricing based on our drawings. The two pipelines are now Canadian pipelines passing through Native Lands and must meet Native demands to protect the Land & Waters ( also John Horgan's demand.) The NEB Report reads." achieving zero risk of a spill is impossible." This is not true. Engineers build safety relief lines and valves & and cross connections will make Line 1 a Spill Safety Pipeline into Vancouver Harbour and our Jasper National Park. Contractors must bid on this. Funny that Kinder Morgan did not think of this !! NEB Pipeline Safety Sheet. " Companies are expected to have a target of zero spills. We will hold them accountable for how they will do this," Jagmeet Singh must take Leadership and bring together BC, AB, Greens &, Native Leaders for the sake of Canada and the NDP Party. TM has not shipped Bitumen, diluted or not to China for 50 years why does anyone think they are salivating to buy diluted Bitumen now even at the US reduced prices. Rachel must create jobs in Alberta and Upgrade the dirty Bitumen. Maybe M. Trudeau will pay some of the cost after all he is willing to go deep in debt for Real Change. Incidentally if they do not come to a Consensus to reduce the capacity and number of Oil Tankers nothing will have changed except the Name of the Owners.
The Supreme Court will never agree that the future of Canada depends on shipping oil to Asia.
Activists, Greenpeace, 350.org ( even tho it is now over 406ppm) and First Nations have done a good job in
in introducing young people to activism. My car is 18 years old and I still need some of IT "Out of the Ground" . Campaign to " Keep IT in the Garage." Cycle and walk more and do not add another lane to 401. Keep your eyes on Mr. Ford!