Kinder Morgan Canada Rises Most Since IPO on Pipeline Decision
(Bloomberg) -- Kinder Morgan Canada Ltd. rose the most since its initial public offering after a regulator’s decision eased concerns that disputes with cities will delay the expansion of its Trans Mountain crude oil pipeline.
Canada’s National Energy Board ruled on Thursday that the company could proceed with construction on the Trans Mountain project in Burnaby, British Columbia, without complying with two sections of the city’s bylaws. The ruling boosted confidence that the federal government, which has approved the pipeline’s expansion, will help the company prevail over local opposition that had threatened to bog down the work.
“This provides a measure of visibility that Kinder Morgan Canada can overcome future bylaw disputes of a similar nature as well as potentially similar disputes if they arise at the provincial level,” Robert Kwan, an analyst at Royal Bank of Canada, said in a note to clients.
Kinder Morgan Canada, a unit of Houston-based Kinder Morgan, rose 4.9 percent to C$17.47 at 10:28 a.m. in Toronto. Earlier, shares of the Calgary-based company climbed as much as 9.5 percent, the biggest intraday gain since they began trading in May.
The Trans Mountain expansion would nearly triple the capacity of the line, which carries crude from Alberta to Canada’s Pacific Coast. While the project has the backing of the federal government and the province of Alberta, the expansion has been opposed by some cities along the route, as well as a coalition of political parties that swept to power in British Columbia in May.
The project also is facing a legal challenge in Canada’s Federal Court of Appeal in Vancouver from opponents including a group of First Nations whose territories the pipeline traverses, the municipalities of Vancouver and Burnaby, and some environmental groups.
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