Morneau Vows Trans Mountain Backstop Will be Commercially Viable
(Bloomberg) -- Canada’s finance minister said his plan to indemnify Kinder Morgan Inc. against losses on its Trans Mountain expansion project would be carried out in a commercially viable way.
Bill Morneau said Thursday the government was not looking to give “a grant or a subsidy” to get the C$7.4 billion ($5.6 billion) pipeline built and that talks are continuing with the company. His comments come a day after he offered an “indemnity” to cover costs of political delays on the pipeline expansion.
“We think there is a way to do it in a commercially appropriate way, so the project is economically viable -- then we can actually provide sort of like insurance,” he said during an interview with BNN Bloomberg. “We can effectively say, ‘Look there is a premium that’s going to get paid but we can insure this sort of delay so that the project gets done.”’
Morneau and Prime Minister Justin Trudeau continue to prod Kinder Morgan Canada Ltd. to go ahead with Trans Mountain. The company set a May 31 deadline for Canada to resolve political and legal uncertainties surrounding the project.
Trudeau, speaking to reporters in New York on Thursday, said the pipeline expansion was in the national interest and also used the term “insurance” to describe his offer to the company. “We are very confident there is a strong business case for a pipeline,” Trudeau said.
Both signaled they were confident another company would want the project if Kinder Morgan decided to balk. Trudeau said only there’d be “alternatives,” while Morneau didn’t specially respond when asked if he’s had talks with rival pipeline companies.
“I’m focused on the discussions we’re having,” Morneau said. “I’m sure there’d be people who’d come forward, because again, it’s commercially viable.”
Pipeline giant Enbridge Inc. said Thursday in an emailed statement it wasn’t in talks to buy Trans Mountain or operate the pipeline.
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